In today’s briefing:
- Japan Weekly | Tech Soars as Geopolitics Risks Ease
- The Overnight Report: Unconditional Surrender
- US Banks – Granular Data on Probability of Default (PD) Points to Strong Consumer Credit Metrics
- AUCTUS ON FRIDAY – 27/06/2025
- WTR Consumer Products Index Lags S&P 600 YTD Despite Relative Earnings Outperformance
Japan Weekly | Tech Soars as Geopolitics Risks Ease
- Nikkei +4.6%, Topix +2.5% – strongest weekly performance since February and new YTD highs, driven by semiconductors and broad-based tech momentum.
- Risk sentiment normalized after initial geopolitical shock from U.S. strikes on Iranian nuclear facilities; focus rotated back to U.S. macro and policy dovishness.
- Sector divergence – semiconductors and telcos sharply outperform; Oil & Gas lags amid energy volatility.
The Overnight Report: Unconditional Surrender
- Markets were back to risk-on and then take profit mode overnight as President Trump seeks full surrender from Iran.
- The world waits and watches whether the US will become involved in the Israel/Iran conflict.
- All things considered, the reaction was fairly tame. ASX200 futures are looking at a softer open ahead of the Federal FOMC meeting tomorrow.
US Banks – Granular Data on Probability of Default (PD) Points to Strong Consumer Credit Metrics
- Quarterly granular data from US banks is collated by the Fed showing consumer loans broken down by PD bucket
- The data through 1Q25 may be counterintuitive with what shows some of the best credit metrics in the time series
- The best two PD buckets for both residential mortgage loans and credit card loans, are both rising as a proportion of total, and at peaks in the series
AUCTUS ON FRIDAY – 27/06/2025
- AUCTUS PUBLICATIONS ________________________________________ New Zealand Energy (NZ CN)C: Financial update – New Zealand has received short term loans totalling C$0.48 mm from Charlestown Energy Partners and a company controlled by New Zealand’s Chairman.
- The loans, which were issued with an original issuance discount of 10%.
- are unsecured and non-convertible, with interest payable at 15% per annum and repayment is due on August 27, 2025, The company now intends to complete a private placement.
WTR Consumer Products Index Lags S&P 600 YTD Despite Relative Earnings Outperformance
- The WTR Consumer Products Index is down 17.5% YTD through June 23, 2025, on a 2.8x decline in its 12-month prospective absolute P/E ratio to 15.3x from 18.1x at the end of 2024.
- Prospective earnings for the index are down 2.3% so far this year, but we note that it has outperformed the broader S&P 600 Small Cap Index, which is down 6.3%.
- Meanwhile, the S&P SmallCap 600 Index is down 13.1% YTD, better than the WTR Consumer Products Index, despite relative earnings underperformance versus our index, as its prospective absolute P/E ratio compressed a lesser 1.2x to 15.3x from 16.5x at the end of 2024.
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