Latest / Best of Business / Sam Dickie: Fisher Funds expert on US earnings season being impacted by Middle East conflict

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Sam Dickie: Fisher Funds expert on US earnings season being impacted by Middle East conflict · Best of Business

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  Speaker 1: You're listening to a podcast from News Talk sed B.
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  Speaker 2: Now the US earning season is in full swing. Companies
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  Speaker 2: are giving us real time feedback on how the economy
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  Speaker 2: is faring since the Iran war began. Sam Dickey is
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  Speaker 2: with Fisher Funds and with US Now, Hi Sam, hey here,
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  Speaker 2: that's a going yeah, good.
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  Speaker 3: Thank you.
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  Speaker 2: So what is the big picture from the companies that
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  Speaker 2: have reported so far?
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  Speaker 3: Yes, early days it is only about five to ten
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  Speaker 3: percent of companies have reported, But given the size of
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  Speaker 3: the Iran oil shocks, it's critical to keep a really
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  Speaker 3: close eye on what they're saying. And there's a clear pattern.
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  Speaker 3: I think we'd call it beat backwards looking at these expectations,
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  Speaker 3: beat and worn about the outlook. So the numbers for
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  Speaker 3: the last quarter were generally strong and the outlook is cautious.
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  Speaker 3: So JP Morgan, for example, beat expectations, but CEO Jamie
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  Speaker 3: Diamond flagged increasingly complex risks and quietly cut the full
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  Speaker 3: year income forecast goal. When Sach's posted record equities trading
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  Speaker 3: City Group had its best trading quarter deck in a decade.
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  Speaker 3: So the banks are making a fortune trading the volatility
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  Speaker 3: the war is creating, but they're retail businesses that the
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  Speaker 3: CEO is are cautious about the real economy impact, and
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  Speaker 3: it is the same outside the bank. So Delta Airlines
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  Speaker 3: actually beat earning the expectations, saying demand was still broad
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  Speaker 3: based and strong. But jet fuel is more than doubled
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  Speaker 3: as we know, and they're meaningfully reducing flights and it's
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  Speaker 3: too early, according to the CEO to update the full
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  Speaker 3: year outlook.
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  Speaker 2: Now, are you spotting any winners and losers that surprise you?
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  Speaker 3: There are the sort of three lanes forming. So lane
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  Speaker 3: one is said it before. AI hasn't blinked in ASML
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  Speaker 3: reported earnings last night. They make the machines that make
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  Speaker 3: the world's most advanced AI chips. They raised guidance. Their
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  Speaker 3: CEO said demand for chips is significantly outstripping supply. Johnston
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  Speaker 3: and Johnson completely different tack here, raised guidance. People still
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  Speaker 3: need medicines. So companies with structural non discretionary demanded doing fine.
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  Speaker 1: Now.
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  Speaker 3: On the other hand, laying two luxury and discretionary spinning
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  Speaker 3: is getting crushed. So Louis Verton, Mahld Hennessy, Olvia MAT's
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  Speaker 3: the biggest luxury company on Earth. Its fashion revenue was
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  Speaker 3: down nine percent and the stock had one of its
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  Speaker 3: worst quarters ever. I think it's worst stop price performance ever,
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  Speaker 3: worse than the GFC. So the consumer who chooses to
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  Speaker 3: spin is pulling back and lane three and this one
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  Speaker 3: was more surprising. Even the oil companies aren't straightforward winners.
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  Speaker 3: So Exon had twenty percent of its global production physically disrupted,
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  Speaker 3: two LNG trains and Katara damage and that's possibly years
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  Speaker 3: to appear. So high oil prices are not the same
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  Speaker 3: thing as a good time for oil companies.
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  Speaker 2: Fair enough, What does this mean then, do you think
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  Speaker 2: for investors?
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  Speaker 3: We just noted your comment before I came on about
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  Speaker 3: these sort of tentative cease fires or tentative truces. And
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  Speaker 3: it is interesting that the S and P five hundred
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  Speaker 3: just closed above seven thousand for the first time ever,
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  Speaker 3: so all time highs up eleven percent in two weeks
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  Speaker 3: despite the turmoil, So the markets acknowledged the risk of
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  Speaker 3: rising inflation and falling growth. But this tentative truth is
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  Speaker 3: stoken enthusiasm that this will be temporary, and importantly, Earning's
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  Speaker 3: growth is still strong again. Early days but while stocks
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  Speaker 3: are up, the earnings growth justified that for now. So
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  Speaker 3: let's keep a really close eye on this critical earning
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  Speaker 3: season as it develops.
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  Speaker 2: Yeah that's a fair port. Hey, thank you very much.
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  Speaker 2: As always, Sam, look after yourself. Sam Dicky Official funds.
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