The local market rebounded today, busting a four day losing streak, with the ASX 200 91.10 points or 1.30% to 7,095.10 after setting a new 50-day low. The index has lost -2.53% for the last five days but is virtually unchanged over the last year to date.
The top-performing stocks in this index are Megaport Ltd (ASX:MP1) and Bellevue Gold Ltd (ASX:BGL) up 32.74% and 15.57% respectively.
Megaport boosted its earnings guidance for the second time in three months, with FY23 normalised EBITDA expected to be $19 million-$21 million versus previous guidance of $16 million-$18 million, implying an 18% upgrade at the midpoints.
Reported EBITDA guidance is now expected to be $24 million to $26 million.
Megaport also stated it was net cash positive in Q4FY23 inclusive of redundancy payments of approximately $2.6 million.
The company is still finalising its FY24 budget but expects its FY24 EBITDA guidance to be higher than previous guidance of $41 million to $46 million.
Looking at the sectors, all were positive. Information Technology and Real Estate were the best performed, jumping 2.42% and 1.65% respectively.
Two things to watch for the rest of the week
eToro market analyst Josh Gilbert shares his two things to watch in Australia tomorrow.
1. Speech from RBA Governor Philip Lowe - A hawk or dove?
The Reserve Bank of Australia left rates on hold last week, stating uncertainty surrounding the economic outlook and allowing time to assess the state of the economy after raising rates by 4% in a short period of time.
This week (Wed July 12), we hear from RBA governor Philip Lowe, who should give further insights as to why the board left rates at 4.1% and what may be ahead. The speech comes at a key time for investors but also for Governor Lowe, with his current role up for grabs.
Treasurer Jim Chalmers will decide on the role of governor before the end of July with a shortlist of names already on his desk. The focus of the speech, though, will be on the stance of Phillip Lowe and if he will sustain his hawkish bias or give any hints that the end of the RBA’s tightening cycle is nigh.
He’s unlikely to offer too much to investors, but they may take some comfort in the latest pause as a sign that the board are beginning to wind down the aggressive stance they have taken this year.
2. US inflation - Another step closer to the Fed’s target?
US CPI has made significant progress so far in 2023, enough for the Federal Reserve to pause its hiking cycle last month but not quite enough to satisfy the Fed and signal the end of rate hikes in the US.
Headline inflation could see another notable decline next week (Wed July 12), with current estimates showing a fall to 3.2% from 4% the previous month, thanks mainly to falling energy costs.
The thorn in Jerome Powell’s side is sticky core inflation, which has remained elevated and looks set to stay at 5%, reaffirming another hike at the end of the month.
If inflation, especially core, shows signs of sticking around, alongside a red-hot labour market in the US and consumer spending that is resiliently plodding along, then it may mean rates may keep rising and stay higher for longer than markets are currently pricing.
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