Rudi's View | 10:00 AM
Momentum in corporate profits locally is sharply different from the US, and today's Fourth Industrial revolution goes a long way explaining it.
By Rudi Filapek-Vandyck, Editor
The point of difference has been highlighted many times over, by myself and others, but it is still worth repeating because of the many valuable signals for investors in Australia.
US equities are not solely outperforming because the US is a net exporter of crude oil and gas or because the Federal Reserve is in no mood to follow in the RBA's footsteps and start hiking rates.
US equities are outperforming because corporate results are healthy, robust, overwhelmingly better-than-forecast and the current quarterly result season is yet again forcing analysts to raise their projections for the year ahead.
Down Under Is Struggling
It's a rather bleak comparison, but Australian investors instead see retailer Accent Group ((AX1)) issue a profit warning much worse than already is reflected in reduced forecasts (analysts saw it coming, but are still negatively surprised by the magnitude of today's downgrade), with an unwelcome probe by ASIC on top.
On Thursday last week, it was Woolworths Group's ((WOW)) turn to disappoint, while quarterly trading updates reveal corporate Australia continues to struggle with rising costs (not only due to the energy crisis) and sagging demand locally, including from many a mining company.
When we finally do see a quarterly performance above expectations from ResMed ((RMD)), the market decides healthcare remains in a bear market, and those shares too need to be sold.
Neither ANZ Bank ((ANZ)) or National Australia Bank ((NAB)) results have been able to prevent share prices from weakening.
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