Things to watch out for in this year’s financial results

With Australian retail sales showing signs of cooling, corporate earnings could reveal how rate hikes are affecting shoppers. Morgan Stanley analysts led by Chris Nicoll said in a report that they would closely track changes in consumer spending after the RBA’s move.

Loading

A rate hike could help banks’ net profit margins, the broker added. According to Morgan Stanley, whether that gain can boost stock prices “will set the broader tone for the market.”

Australia’s Commonwealth Bank, the country’s largest bank, reported Wednesday.

Key stocks to watch: Woolworths (YTD +0.2% price performance), Commonwealth Bank (YTD -0.5%), Harvey Norman (YTD -16%), JB Hi-Fi (YTD -11%), Qantas (YTD -8.2%)

Resource grace?

Amid falling iron ore prices, China’s property crisis and rising cost pressures, attention will be focused on the resources sector, the lifeblood of the economy.

Citigroup expects the pandemic-fueled materials boom to continue in the near term, boosting mining earnings.

Still, JP Morgan has cut material from overweight to neutral due to continued macro concerns and the minors’ uncertain dividend outlook, the broker said in a note.

Key stocks to watch: BHP (4.5% YTD), Fortescue Metals Group (-6.2% YTD), Champion Iron (-16% YTD), Woodside Energy (+48% YTD)

labor challenges

Comments on labor issues will be watched closely as businesses from miners to airlines mourn staffing shortages.

Both BHP and Rio Tinto cite labor shortages as a drag on production. Qantas faces backlash After flight cancellations or service delays due to staff shortages.

“On last quarter’s earnings call, management noted the difficulty of finding skilled trade experts,” UBS analysts, including Richard Scherbach, wrote in a report. Firms will also provide commentary on the challenges they face in filling positions in the more white-collar sectors.”

Key stocks to watch: BHP, Fortescue, Woolworths, Qantas, Vega Cheese (-38% YTD), Suncorp Group (+3.8% YTD)

Dividend Watch

Loading

Of the companies in the local benchmark, those reporting this month will pay about $15.29 billion in dividends, up 26% from the same period last year, according to data compiled by Bloomberg.

Energy stocks are expected to lead payments growth in 2022 due to higher commodity prices. Consumer discretionary firms are tipped for the biggest drop after some firms skipped payments earlier this year.

Miners will be in the spotlight after Rio cuts dividends. Still, Citigroup analyst Liz Ding said in a note to clients that she expects strong cash flow and Undergear’s balance sheet will allow large miners to offer high dividends to shareholders. increase.

A recovery in international tourism could provide room for travel companies such as Qantas to resume paying shareholders.

Key stocks to watch: BHP, Commonwealth Bank, Newcrest Mining (YTD -22%), Qantas, Whitehaven Coal (YTD +146%)

bloomberg

Our Business Briefing Newsletter delivers headlines, exclusives and expert opinion. Sign up to pick up weekday mornings.