Jim Taylor: What’s driving the ASX this week
There were plenty of hits and misses in the ASX’s half-year reports – and high levels of volatility around results drove some big moves in the market.
By last week some 40 per cent of stocks had moved more than 5 per cent either way after reporting – a level not seen since 2019 and well ahead of the 25 per cent or so average going back to 2007.
Pendal PM Jim Taylor noted a new high for the ratio of a stock’s earnings-day move versus its 30-day average daily move.
“This hit 5x, versus an average of 3x in reporting seasons back to 2007,” he said.
“The savage reaction to earnings misses is driving corporate Australia to be much more proactive in cost-cutting to support earnings.
“They are also more constructive on share buy-backs as a mechanism to support the stock in increasingly volatile times.”
Consensus ASX200 profit expectations for FY25 and FY26 fell slightly, due mainly to lower-than-expected earnings factored into some larger-cap names in energy, banking, health care and tech.
