FNArena’s Weekly Insights – February 03 2020

Last year, the two major corporate reporting seasons attracted larger-than-usual numbers of profit warnings in the weeks leading up to February and August. January this year has not generated similar large numbers, but profit warnings are coming through nevertheless.

With share market indices near an all-time high, the response from nervy investors can be quite unsettling for shareholders owning the shares of companies issuing a warning.

One would have thought with bushfires raging through towns and villages in NSW and Victoria, and with anecdotal evidence signaling consumers stopped spending post Boxing Day, while the Aussie dollar tried to rally above US70c in the meantime, investors would be a little cautious ahead of the upcoming February reporting season, but the start of the new calendar year showed no such restraint.

We can all but wonder where the share market would be without the coronavirus, but the observation remains that profit warnings remain part and parcel of corporate profit seasons in Australia.

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