Home / Daily Market Update / ASX marches to new high as earnings results impress

More records on climate change opportunity, James Hardie sees renovation boom

It was another banner day for the sharemarket with the ASX200 (ASX: XJO) adding another 0.3% driven higher by an incredible rally in the lithium or ‘green energy’ sector.

Whilst the materials sector was down 0.1% for the day, the likes of Pilbara (ASX: PLS) and Orocobre (ASX: ORE) were enough to support the market jumping 11% and 9% respectively after JP Morgan upgraded their views on the sector.

This follows yesterday’s release of the UN’s Climate Change report suggesting massive investment in green energy will be required, none of which can occur without battery storage.

Elsewhere the IT sector continued its strong rally adding 1.6% whilst the industrials sector was hit after Transurban (ASX: TCL) dropped another 2.9% following yesterday’s difficult earnings update.

As reported yesterday, whilst the likes of the Commonwealth Bank (ASX: CBA) invest in the BNPL sector, National Australia Bank (ASX: NAB) has doubled down on credit cards announcing the purchase of Citigroup’s Australian consumer business, which includes $8 billion of mortgages and $3.7 billion in credit card balances at a cost of $1.2 billion. 

Challenger reverses losses, building products show no signs of slowing, confidence slumps

James Hardie (ASX:JHX) hit a record high exceeding $50 per share for the first time, jumping 1.9% after delivering an elevenfold increase in profit to US$121 million for the financial year; that’s 1191%.

The result was powered by a strong performance in all three key divisions including building products and fibre cement withUS sales up 28%, Europe 37% and Australia 33%, the ninth consecutive quarter of growth according to management.

Interestingly sales revenue jumped 35% despite the volume of products only increasing by 25% in a sign they had benefitted from short term shortages through higher prices. Challenger (ASX: CGF) added 1.9% continuing its recent recovery even as the CEO Richard Howes announced he would be stepping down.

Shareholders looked beyond the announcement towards the improving financials with profit hitting $592 million a stunning turnaround from last year’s $416 million loss.

The result was driven by a 14% increase in their life annuity book along with another $16 billion in inflows into their fast-growing Fidante asset management business, which his $110 billion in assets under management.

Both retail and institutional annuity sales improved, up 19% and 53% respectively as the disruption of the financial advice sector reduces and industry funds become more focused on delivering retirement solutions; all this whilst a strategic buyer has acquired 18% of the company.

Infrastructure bill passes, growth off as cyclicals rally, more inflation numbers ahead

The rotation from growth and technology stocks continued to gather steam overnight with the Nasdaq falling 0.5% as traders grow more concerned about the long-term economic outlook.

The Dow Jones and S&P 500 were both higher, by 0.5% and 0.1% after the oil price staged another recovery.

All eyes were on Washington though as the Senate finally passed an infrastructure bill that has been in the pipeline for several years. The policy will see US$1 trillion in spending, an additional US$550 billion on what was already planned, which whilst positive is just a drop in the ocean compared to the size of the US economy.

Programmatic advertising group The Trade Desk (NYSE: TTD) jumped 7.6% after delivering another strong earnings result with revenue doubling on 2020 levels to US$280 million, profit also doubled to US$47 million.

The company works alongside the likes of Google, Netflix and Facebook to deliver regular, targeted advertising which are seeing a huge recovery after last year’s weakness.