Josh Gilbert, market analyst at eToro, shares his three things to watch in Australia in the coming days.
Australian unemployment
All eyes will be on Thursday’s announcement of Australia’s January unemployment rate, after December’s higher-than-expected rise to 3.9%.
December’s uptick was perceived as a sign that the labour market could be loosening up, with job advertisement figures dipping and population growth remaining robust, suggesting that we might see a further rise in unemployment next week.
Strong employment growth counterbalanced December’s unemployment rate, a positive takeaway for the RBA, considering they’d also been handed favourable inflation data and relatively soft retail sales figures in the weeks leading up to Christmas.
This week’s cash rate decision further suggests that the RBA’s hikes are being left behind in 2023; however, it’s likely to be one of the last major central banks to introduce rate cuts this year.
Investors must remember that despite global expectations of a rate cut by the US Federal Reserve by March, a similar move from the RBA is not likely to be swift. But, as Taylor Swift would say, 'Shake it off' and keep an eye on the economic trends.
As we approach the release of January’s unemployment data, investors should keep a close eye on the evolving labour market conditions and the potential impacts on monetary policy.
CSL’s half-year results
Healthcare may have been an underperformer on the ASX last year but with an economic slowdown looming, prudent investors are keeping an eye on the sector, with CSL’s FY24 half-year results being a focal point.
While CSL’s shares have risen 30% since its low in October, the company’s share price faced a decline earlier in the week following news of a UK investigation into alleged anti-competitive behaviour from CSL Vifor. If found guilty, CSL faces potential fines and reputational damage, which may impact the company’s FY24 results.
Shareholders were pleased with the healthcare giant’s FY23 results, where revenue growth went up 31% year-over-year to US$13.31 billion, and the company’s FY24 guidance continued to hold firm.
CSL's projected underlying profit range of US$2.9 billion to US$3 billion for FY24 has provided reassurance to investors eagerly anticipating the company's half-year results. They are keen to ascertain whether CSL has sustained its course toward recovery following the turbulence its share price experienced in 2023.
Telstra’s half-year results
It’s been a lacklustre couple of years for Telstra with shares falling by around 2% in that time despite a 14% jump in profitability last year. This week's half-year results will be a key insight as to how cost-cutting has aided the business's bottom line.
The good news is that Telstra’s profits look set to continue growing. In August, the business forecasted an EBITDA of A$8.2 billion to A$8.4 billion in FY24, well ahead of FY23's A$7.86 billion.
Telstra's move in November to secure a significant portion of mid-band 5G allocation will undeniably have ripple effects on its FY24 half-year results.
The key will be how effectively this spectrum purchase is leveraged to increase market dominance, particularly as 5G continues to become the new standard.
Investors will be eager to see how this step influences its half-year results, and whether this gamble pays off in terms of customer acquisition and retention. With this move, Telstra seems to be aiming for a larger slice of the digital economy.
Interest rates and their potential impact on Telstra shares have also been a hot topic of late, with the possibility of rate cuts later in the year signifying that Telstra could become a more attractive proposition for yield-seeking investors as cash loosens up.