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Morning Research Notes - 19.07.24
Significant market shifts occurred yesterday with tech stocks falling, mixed earnings reports, and potential corporate restructures on the horizon. Brent (oil) traded 0.5% higher, with the current price per barrel sitting at $85.46. Spot gold also fell 0.2%, with the current price per ounce standing at $2453.33. Volatility, as measured by the VIX index, increased by 10% to $15.93.
Yesterday, the market faced a downturn with the S&P 500 and NASDAQ falling due to a shift away from megacap tech stocks such as Apple, Google, Amazon, and Microsoft. In earnings news, Netflix’s Q3 revenue guidance didn’t meet estimates, disappointing investors, while DR Horton posted strong earnings. However, Domino’s Pizza missed sales estimates. The labor market showed signs of cooling with higher than expected jobless claims. In other news, Warner Bros Discovery is reportedly considering a breakup, and Beyond Meat is discussing a balance sheet restructuring. It was a day full of significant market movements.
The ASX 200 fell by 0.27% on Wednesday, with Utilities (0.35%) and Health Care (0.28%) appreciating, whereas Info Tech (-3.39%), Materials (-0.24%) and Financials (-0.18%) fell. Commodity markets ended the day broadly lower, with Zinc(-2.91%), Copper (-2%), Aluminum (-1.18%) and Nickel (-1.01%) depreciating in value whilst Iron ore (0.1%) gained value.
In other news,APRA to reduce Westpac’s risk capital by $500 million, Australian Ethical flags net inflows for June quarter, Whitehaven meets guidance. (Source: AFR)
Chart of the day
Pro Medicus stands out as the top performer on the ASX over the past decade, delivering an impressive annualised return of 63%. This company has carved a niche for itself in the healthcare IT sector, specialising in radiology imaging software. Its flagship product, Visage 7, has been well-received in the market. The scalability of Pro Medicus is evident from its robust revenue and earnings growth, coupled with expanding margins. High valuation levels of the shares reflect strong investor confidence. However, it’s important to note that the shares are currently considered expensive. All in all, Pro Medicus presents a promising investment opportunity in the healthcare IT sector.
Source: News and Insights, Stocks, Morningstar
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