Rudi's View | Aug 07 2025
In today's edition:
-August Updates Are A-Comin'
-The Era Of Polarisation
-Morgan Stanley's Hot Favourites For August
-Attention Returns To AI Infrastructure
-FNArena Talks
-Review All-Weather Model Portfolio
-Best Buys & Conviction Calls
By Rudi Filapek-Vandyck
August Updates Are A-Comin'
The Australian corporate results season has officially started but, as per unofficial tradition, the pace of corporate releases remains rather glacial this early in the month.
By week's end FNArena's Corporate Results Monitor will only list some 18 companies, not more than a drop in the ocean given that number will be around 385 or so by early September, but that's just how this cookie crumbles in Australia nowadays.
Are there any conclusions that could possibly be drawn this early?
Nah. But we do note the REITs have been a positive contributor thus far, as anticipated by analysts covering the sector.
Plus all of ResMed ((RMD)), News Corp ((NWS)) and Credit Corp ((CCP)) managed to outperform forecasts while updates from REA Group ((REA)), AMP Ltd ((AMP)) and Pinnacle Investment Management ((PNI)) contained enough good news to keep the share price well-supported.
One might say the season has begun on a relative positive note, but let's not get overly excited just yet. There's literally a deluge in releases awaiting us over the coming three weeks (plus a bit).
By this time next week, the numbers will be a lot larger, but the bulk is reserved for the final two weeks of the month.
FNArena is keeping a close watch daily: https://fnarena.com/index.php/reporting_season/
The Era Of Polarisation
A timely reminder entered the inbox this week: it's not just share markets that are heavily polarised nowadays, the same observation applies to the economies underneath.
Economists at Oxford Economics shared the following observations about the US economy:
"The economy has slowed and is growing below its short-run potential, but this hasn’t altered the bifurcated nature of the consumer, business environment, and labor market. This leaves the economy more vulnerable and masks some of the fissures beneath the aggregate economic data.
"High-income consumers are doing well while lower-income households are struggling. Trade and fiscal policy will reinforce the bifurcated consumer. The net impact of tariffs and fiscal policy will reduce the lowest-income quintiles' real disposable income by 2.5%-3% while boosting the highest incomes by the same amount.
"As large businesses can weather tariffs better, they outperform small ones, reinforcing recent labor market weakness. Employment among small businesses, the backbone of the labor market, has barely budged and fundamentals remain unfavorable.
"It’s also a tale of two labor markets. It’s a good labor market for those with a job, but a challenging one for those who are unemployed or not in the labor force but want a job. The bifurcated labor market can change quickly if layoffs increase, a significant risk to the forecasts."
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