[ad_1]
These will cover the six months to the end of June, which is New Zealand economy.
On a per capita basis, the country’s deficit narrowed further, continuing an 18-month downward trend.
House prices fell in four of those six months, while mortgage rates rose to their highest level in 16 years and unemployment rose steadily.
This backdrop means that businesses exposed to the economic cycle, especially those that rely on discretionary spending, will endure another challenging period.
However, since the books were closed on the June 30 settlement date, we may have seen some progress.
In July, the ANZ Business Outlook Survey showed the biggest rise in confidence in nine months, with the outlook for future activity in the construction and services sectors showing the biggest increases.
This supports anecdotal evidence of improving conditions over the past month, at least in some sectors.
Although not numerous, these early green shoots may be due to inflationthe long-awaited drop in mortgage rates, or simply the belief that things can’t get worse.
Any early signs of recovery will be more evident in management’s outlook commentary than in hard data.
This is exactly what analysts were hoping for, as 2025 earnings forecasts still reflect a strong rebound.
There will be plenty of events to watch over the next few days, with many of the market heavyweights set to report earnings.
Contact Energy, Auckland Airport, the NZX itself and Spark are all on the list, while across the Tasman, quarterly reports from Westpac and ANZ will also give the market more insight into the current situation.
Freight roads and Port of Tauranga will become the focus.
Two other companies that have received much attention are a2 Milk and Fletcher Building, which have had opposite performances this year.
While a2 Milk shares have surged more than 60 per cent to their highest level in three years, Fletchers shares have fallen by more than a third to levels not seen since 2002.
The listed property sector may be about to turn a corner as interest rates are set to fall, while power company profits will come into focus as wholesale electricity prices soar.
While there are some bright spots amid the gloom, the period covered by this reporting season is close to our economy’s greatest pain point.
Investors should prepare for some disappointing results, but also hope for some encouraging commentary about how the balance of this year and 2025 will play out.
Mark Lister is the Investment Director of Craigs Investment Partners. The information in this article is for informational purposes only and is intended as general information and does not take into account your financial situation, goals, objectives or risk tolerance. Craigs Investment Partners recommends that you contact an investment advisor before making any investment decision.
[ad_2]
Source link
