1) After a difficult 2022, it has been a great start to the new calendar year for stock market investors, with the S&P/ASX 200 Index (ASX: XJO) up more than 6% in January.
US markets have been even stronger, especially the tech-heavy Nasdaq Composite (NASDAQ: .IXIC), up close to 10% to start 2023.
But the good times could be about to come to a screaming halt, with Morgan Stanley's Michael Wilson warning "the stock market's January rally could end this week".
Wilson says the January rally is "just another bear-market trap" as central banks in the US and here in Australia prepare to hike interest rates yet further as they attempt to tame inflation.
2) It appears the ASX 200 index didn't get the Morgan Stanley memo, up a solid 0.46% to 7,516 in late morning trade on Tuesday.
So much for the oncoming economic slowdown here in Australia — the ASX 200 is up almost 8% over the past 12 months.
Perhaps it's like the Aussie consumer – we know there are some tough times ahead, especially for those with mortgages but also for renters – but damn it if we're not going to have some fun before reality bites.
The Woolworths Group Ltd (ASX: WOW) share price is up 2.6% to $35.66 on Tuesday, whereupon it trades on 26 times earnings and on a 2.6% fully franked dividend yield. I get the defensive nature of its earnings, but I'd rather take 4% in a savings account than risk my money on Woolworths shares at today's price.
3) Stock winner of the day
Not many big winners to choose from today despite quarterly updates coming out faster than a Novak Djokovic serve.
The Moneyme Ltd (ASX: MME) share price is up 16% to 32.5 cents after the consumer money lender said it delivered record revenue and a statutory profit in Q2, "beating analyst expectations".
It's a welcome turnaround in the fortunes of the Moneyme share price, given it has fallen 83% in the past 12 months. Consumer lending faces some serious headwinds as the economy weakens, both from lower new loan originations and from higher defaults. As to whether that is already priced into Moneyme shares is anyone's guess, while acknowledging the company is managing to the current macro environment and is committed to driving profitable growth.
4) Stock loser(s) of the day
Unlike the winner's circle, we have plenty of losers to choose from for today's stock flops.
A trading update from former high-flyer BWX Ltd (ASX: BWX) was a shocker, with the owner of Sukin and other beauty and wellness products lowering revenue and profit guidance.
"We are revising our forecast on the basis of our cash-constrained environment having impacted our ability to trade effectively and led to a temporary increase in out of stocks and a need to reduce promotions to conserve cash and protect stock levels."
The BWX share price has fallen 93.5% in the past 12 months. Steer well clear of this fallen knife.
I've long been mystified by the huge market capitalisation placed on Megaport Ltd (ASX: MP1) given its relatively modest size.
The "global leading provider of Elastic Interconnection services" said total revenue for the Q2 was $37 million, up 10% quarter on quarter, and delivered earnings before interest, tax, depreciation, and amortisation (EBITDA) profit for the quarter. Although revenue is sticky due to low customer churn, Megaport did note the "current economic uncertainty seems to be delaying customer decision making, lengthening sales cycles".
The Megaport share price is down 16% to $6.45 in Tuesday trading, and off 52% over the past 12 months. With a market capitalisation of $1 billion, even after today's fall, investors are being asked to pay a pretty price for a pretty modestly sized company.
The Pointerra Ltd (ASX:3 DP) share price is on the nose today, down 17% to 19 cents, after the company that "helps customers answer almost any physical asset management question" said program delays by some US customers impacted invoicing in Q2.
The Pointerra share price went parabolic in early 2021, soaring at one stage over 30 times in value as investor enthusiasm went nuts. It's been mostly downhill since February 2021, with the Pointerra share price plunging 77% from those epic highs.
The rubber now needs to hit the road for Pointerra, with investors no longer valuing the company on hope. With a cash balance of just $2.75 million and the most recent quarter showing operating outflow of almost $1 million, investors better hope the "expected rebound in Q3 and Q4" becomes a reality.
