Westpac to kick off bank earnings season

Westpac Banking Corp will kick off the local bank earnings season when it reports today having signalled A$273 million of restructuring charges will show up in some rejigged accounts, with Bank of New Zealand-parent National Australia Bank due later this week and ANZ Group Holdings bringing up the rear next week.

That comes as Australian futures point to a soft start to the week for the S&P/ASX 200 index when trading opens across the Tasman with the Reserve Bank of Australia’s rate decision on Tuesday and New Zealand’s labour data on Wednesday the main events in the antipodes.

Low-cost KiwiSaver provider Simplicity is making more waves with the launch of its InfraKiwi unit to invest in infrastructure assets with a view to ultimately listing on the NZX.

And Amazon paced gains on Wall Street on Friday after the e-commerce giant raised its forecasts above analysts’ expectations.

Bank on it

Westpac Banking Corp is due to report its annual result today, with one of Australia’s four pillars flagging last month that the result will include a A$273 million restructuring charge, with the benefits to really start showing in the coming financial years. The bank also signalled a A$56 million charge on its hedging.

The lender has tweaked its operating structure which will change the make-up of its segments, if not the bottom line.

Westpac is the first of the three major Australian banks reporting this season, with BNZ-parent National Australia Bank due on Thursday, and ANZ scheduled for Monday next week.

That comes as Australian futures are pointing to a 0.2% decline for the ASX200 index when trading opens across the Tasman as commodity prices come of the boil for the resources rich bourse, with gold futures down 0.1% at US$4,013 an ounce and Brent crude futures declining 0.3% to US$64.58 a barrel.

The Organization of the Petroleum Exporting Countries and its allies agreed to boost oil production in December, signalling they will keep output steady in the first three months of 2026, while oil majors ExxonMobil and Chevron reported softer quarterly earnings on Friday on weaker oil prices.

Unstoppable

Wall Street was broadly stronger on Friday, with the S&P 500 up 0.3% and the tech-heavy Nasdaq Composite advancing 0.6% as Amazon beat expectations and raised its forecasts above analysts’ predictions, spurring the e-commerce giant to an all-time high.

Five of the Magnificent 7 megacap stocks reported last week, reaffirming plans to continue spending heavily on artificial intelligence infrastructure.

US corporate earnings season has largely beaten expectations so far. Of the almost two-thirds of companies on the S&P 500 reporting, about 83% have beaten estimates, according to FactSet analysis.

Meanwhile, Berkshire Hathaway reported a record cash pile of US$381.7 billion on Saturday, saying it remains cautious about markets and extending its net selling run to 12 quarters.

Across the Atlantic, stock markets were weaker on Friday, with London’s FTSE 100 down 0.4%, Germany’s DAX 30 declining 0.7% and France’s CAC 40 slipping 0.4%.

Locally, the main events this week are the Reserve Bank of Australia’s rate review on Tuesday, which is expected to keep the target cash rate at 3.6% after a surprise acceleration in inflation. The kiwi dollar traded at 87.44 Australian cents at 7am in Auckland from 87.51 cents on Friday, and fell to 57.15 US cents from 57.32 cents.

Meanwhile, Statistics New Zealand’s September quarter jobs data on Wednesday are the main release on this side of the Tasman.

Today’s data include Stats NZ’s building consents for September.

And low-cost fund manager Simplicity today unveiled plans to invest more heavily in infrastructure with the launch of its InfraKiwi unit. The entity will be seeded with private equity investment from Simplicity, with an ultimate goal to list on the NZX.

The InfraKiwi entity will focus on infrastructure investments in energy, water, transport, data and social assets.

“We think matching the long-term infrastructure needs of New Zealand, with the capital New Zealanders will save, will generate stable returns for investors and promote a thriving infrastructure sector supported by much-needed jobs,” Simplicity chair Rob Everett said in a statement.

“Without mechanisms like this, more of our savings will continue to be invested offshore, making investors money, but missing the opportunity to help fund productive assets at home.”

Reporting by Paul McBeth. Image from Curious News.