Josh Gilbert, market analyst at eToro, shares his three things to watch in Australia in the coming days.
Metcash earnings
Wholesaler and conglomerate Metcash is expected to post its annual earnings on Monday.
Historically, Metcash has rewarded shareholders with satisfying returns over the last five years but its attractive run has slowed significantly over 2024.
Despite owning and supplying some significant names in the grocery and convenience space, such as IGA, FoodWorks, bp and 7/11, Metcash’s earnings forecast is mixed. A small decline over FY24 is expected, due to mixed industry pressures over the last year.
One silver lining is that the conglomerate has just successfully completed its acquisition of Superior Foods, which is Australia’s third-largest food services distribution business, and with Metcash’s historically decent long-term performance, continued expansion across the food services sector may be enough incentive for shareholders to hang on, even with the prospect of middling results for this year.
At the time of writing, Metcash’s shares have risen by 8.7% since the beginning of the year.
AU CPI
Inflation continues to prove to be a difficult beast to tame, having exceeded forecasts in the last two months and blowing rate cut expectations off the 2024 calendar altogether.
Optimism from earlier in the year that inflation was gradually coming under control has waned and globally, central banks have tempered expectations of multiple rate cuts before year’s end.
Strong population growth, along with high rents and the high cost of food and essential goods continue to be oft-cited reasons for spending staying high. However, Australia’s unemployment rate has stayed at around 4.0% in recent months, which has helped to assuage fears of a hike.
Markets are pricing rates to stay at 4.35% until Q1 2025 and this monthly CPI (as well as the quarterly reading coming up on July 31) would have to break dramatically with current trends to move the dial either way.
Nike earnings
Nike, one of the biggest sporting brands in the world, will post its annual earnings on Thursday, with markets firmly expecting a year-over-year increase in earnings.
Some analysts have reduced the scope of their optimism in recent days due to weaker-than-expected sales in the first half of FY2024, but there’s plenty of optimism surrounding 2025 for the brand.
eToro analysis suggests that optimism for Nike’s year ahead is well-founded, as a ‘sporty summer’ begins to heat up. In this upcoming quarter, the world’s biggest sportswear brands will be gaining maximum exposure with billions of TV viewers tuning in to watch the Euros, the Olympics, State of Origin and other blockbuster sporting events.
Any Olympics and Euros-inspired boost will be warmly received, as Nike’s shareholders expect strong YoY growth, even against a bleak consumer backdrop.
Regardless, this week’s results should be positive enough to keep investors feeling secure, but it’s unlikely the swoosh will be smashing any earnings records this time around.