Latest / ausbiz a.m / 26.08.26 Henry Jennings, Marcus Today
Transcript
- nadine: Well, good morning to you and welcome to Ozbiz AM. It is the 26th of August. I'm Nadine Blaney, just sitting in for Andrew Gagan today. Well, Aussie Futures are pointing to a healthy 0.7% lift at the open after Wall Street finished higher overnight. The SP 500 and the Dow were up around 0.3%. The NASDAQ put on more than 0.6%. And nice to see the small cap Russell 2000 index also pushed higher. So we saw a rally in semi-stocks helping to lift the market. That included AMD and Micron, of course. This all comes ahead of NVIDIA results due tonight. The market is looking for around 92 billion US dollars in revenue. But really fair to say it's setting up a pretty big test for the AI trade. But interestingly, NVIDIA shares snapped a seven-day decline and were amongst the most actively traded overnight. So consumer stocks were hit hard. That includes Dix Sporting Goods, not a household name here, but it is there. Had a pretty poor result coming through. Target and Walmart also underperformers. US consumer confidence weakened to its lowest level since the start of the year in August. New home sales down by close to 11% in July, with higher mortgage rates there hitting the housing market, which we saw evidenced in some. Results coming through for the likes of Reese here this week. ⁓ so what's looming? Fed chair Kevin Walsh's Jackson Hole keynote on Friday. The market's obviously watching closely for clues on the rate outlook. ⁓ helping to improve sentiment overnight, though, we did see US tenure treasury yields falling for a second day. Gold, silver, and copper rose. Oil eased, Brent was actually down close to 6%, and the good old Aussie dollar. In quite well, trading around 71.6 US cents. So let's make sense of that all and what we can expect here today. And very pleased to welcome Henry Jennings from Marcus Today to the potty. Hey Henry. henry: Hey Nadine, how are you this morning? nadine: Very well, thank you. ⁓ listen, what do you make of all that from overnight? henry: Well, I guess it sets us up for another positive day in the Australian market. We had a pretty good day yesterday after those RBA minutes helped as well. And I have to be honest, know, reporting season has been, you know, it's always going to be volatile. It's always going to be somewhat mixed. But here we are approaching all time highs again. So it hasn't been a bad reporting season on the whole, I have to say. I mean, it's not stellar like the US. But then I think going into it, our expectations were low. So that is we have surpassed those expectations as my old headmaster used to say. But yeah, it's going to be an interesting day. Wise Tech is going to be one of the big features today, obviously, to see if that business is firing with all the issues that have been going on in the background. So all eyes on Wise Tech. And of course, we can't go past the big one, which is Nvidia and Jackson Hole later this week. So there's plenty going on and the summer silly season is drawing to a close in the northern hemisphere. nadine: Mm-hmm. henry: and things get back to a little bit more normality in September after their holiday there and liquidity does increase, which may be a good thing because we do get some silly moves and some silly stuff happening over the summer in that Northern Hemisphere. nadine: Yeah, good point. ⁓ you know, really wrapping up sort of post-Labor Day. just back to, I suppose, what we've learned from reporting season so far. I know that the dust has not yet settled, and we still have a couple of really big days this week, in fact. But does that speak to just some of the pessimism about the Aussie economy or just Aussie investors being a bit spooked ⁓ because of henry: Yeah. Yeah. nadine: the lack of the AI trade here because of geopolitics. Like I'm just wondering, you deal with people sort of every day. What is the psyche like? What does that tell us that we had such low expectations heading into reporting season? henry: I don't know if I deal with that many people every day Nadine, but certainly, you know, we have seen a mixed picture. We've seen, especially in the retailers, I guess, we've certainly seen the Australian consumer far more circumspect about what they spend their money on. And we've seen that in spades. I you've only got to look at the reaction of Kogan and JP Hi-Fi to an extent there to see that. But Universal Stores was a good result. So the other thing, I guess, which has been interesting to watch is the the level of pessimism is manifest in the number of big short positions and some of those short positions have been seriously seriously hurt in this in this current reporting season. looked at EOS yesterday. I think with up to 23 percent is not long ago. I bought that close to seven bucks in ⁓ my small cap portfolio and there I was yesterday selling it at ten dollars twenty in the space of a few weeks. So there has been some punishment meted out to some of those shorters. And I guess the other thing we've learned is that banks are not immune to economic downturns and certainly not immune to tax changes in the budget and certainly not immune to the housing cycle turning against them. And that has become a very competitive environment. But resources have really carried the day. And you've only got to look at BHP, which is certainly on a charge record highs for them. copper story playing out, Rio doing very well as well. there's been a lot to like. Cash piles in the gold sector building up and the gold price obviously obliging as well. So those stocks pushing much higher. So all in all it's a mixed picture and we've seen that bifurcation of the market with resources good and banks bad in the last month or so. So that is I think that's going to continue as we head into the run up. I'm going to say the terrible word here. The run up to Christmas. nadine: Mm-hmm. henry: Well, you know, it's it's I'm going away for a little while and by the time I come back everyone will be talking about Melbourne Cup and Then it's Christmas, you nadine: Yeah. Well, I was scared you were going to say Santa Claus rally. Too soon, Henry, too soon. henry: That's way too soon. I think though the biggest issue today is it's very sad is the passing of Dolly Parton. nadine: I know, I know. R.I.P., what an extraordinary not just artist, but human being. henry: Yeah. to knock out Jolene and I will always love you in one afternoon. nadine: She she was yeah, but absolutely prolific. They just came to her. It was all it was a gift. It was an absolute gift. And she was not shy of sharing. ⁓ yeah, R.I.P. Dolly. I just wanted to pick up on something you said about shorts. ⁓ I was speaking with somebody earlier this week in regards to WiseTech who said, Look, everybody who wanted to get out of WiseTech is out of WiseTech. Everybody who has henry: That's a good afternoon. know, which is great. Ha nadine: questions about Richard Wright and the influence in corporate governance is already out. So do you think there's a pretty good chance Wise Tech could, you know, could rally on a result, almost a relief rally of sorts? henry: Well, I'm hoping that the market will play the ball, the man and try and divorce the two issues, the corporate governance issue, which obviously is a big issue with WiseTech. Although we did see the appointment of a new director, which is going some way to, you know, assuage that issue. But, know, it's going to be interesting. There's eight point six percent of WiseTech shorted. So, you know, there is possibilities there for for a violent reaction and the shorts. You they don't go quietly into this good night. There's 28.9 million shares shorted. So, you know, if there is a slip, if there is a chink in the armor, then they will certainly get aggressive and get stuck in to try and maximize their profits. But if there is some good news and the business is firing and doing what it's supposed to do, absent of the corporate travails of it's not even sure what position he holds anymore, but Richard White. then the market will sprint higher. I think it wants to go higher. I kind of think it wants to believe that we can divorce the two issues. so it's not going to be a stock at the end of the day Nadine that you're going to go and WiseTech closed down 0.1 of a percent today after better than expected results. That is not a headline you're going to see. nadine: Well, I like when you p play my day out how it's going to go. ⁓ any interest in well, you can pick one. Domino's, flight center, La Visa, we've got Sandfire, we've got Worley Woolies. Any interest in those? henry: Hahaha. Think the markets always interested in Domino's Pizza. I'm not sure why again twelve and a half percent of that one is shorted But you know, it's it's it's one of those stocks that everyone's sort of got an opinion on I guess so that's interesting Flight Center as well will be interesting to say the least and to see whether the the consumer sentiment has played into the the travel business so that will be interesting and I guess you know when you look at Woolies as well against Coles Coles had a pretty good result. Your step is up 4.6 or 7 percent. So that was a pretty good reaction to that one. So it will be interesting to see if Coles' fortune is at the expense of Woolies. And they do tend to swap around. But we are coming to the tail end of reporting season. And I have to say, as always, it's been fast and furious. And analysts have been burning the Midlight ⁓ candles to try and get the heads around it. But it has also been interesting, I guess. And sometimes we've seen big Volatile reactions on day one when the results come out for whatever reason and then the following day that gets not Completely reversed, but then that the tone does change a little bit on further reflection So that would be that would be another feature I think of this reporting season and probably most reporting seasons nadine: Well, Henry Jennings, Marcus today. Have a lovely holiday. We'll miss you. We look forward to see you on ⁓ seeing you on the other side, but in the meantime, have a good couple days of trade. henry: I will. Thank you and have a great holiday yourself. nadine: Thank you.