Disappointing Meta Earnings Sends Shudders Through Stock Market
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    HOUSE MEDIAN ASKING PRICES AND WEEKLY CHANGE     Sydney $1,613,207 (-0.60%)       Melbourne $969,484 (-0.54%)       Brisbane $991,125 (-0.15%)       Adelaide $906,278 (+1.12%)       Perth $892,773 (+0.03%)       Hobart $726,294 (-0.04%)       Darwin $657,141 (-1.18%)       Canberra $1,003,818 (-0.83%)       National $1,045,092 (-0.37%)                UNIT MEDIAN ASKING PRICES AND WEEKLY CHANGE     Sydney $754,460 (+0.43%)       Melbourne $495,941 (+0.11%)       Brisbane $587,365 (+0.63%)       Adelaide $442,425 (-2.43%)       Perth $461,417 (+0.53%)       Hobart $511,031 (+0.36%)       Darwin $373,250 (+2.98%)       Canberra $492,184 (-1.10%)       National $537,029 (+0.15%)                HOUSES FOR SALE AND WEEKLY CHANGE     Sydney 9,787 (-116)       Melbourne 14,236 (+55)       Brisbane 8,139 (+64)       Adelaide 2,166 (-18)       Perth 5,782 (+59)       Hobart 1,221 (+5)       Darwin 279 (+4)       Canberra 924 (+36)       National 42,534 (+89)                UNITS FOR SALE AND WEEKLY CHANGE     Sydney 8,638 (-81)       Melbourne 8,327 (-30)       Brisbane 1,728 (-19)       Adelaide 415 (+10)       Perth 1,444 (+2)       Hobart 201 (-10)       Darwin 392 (-7)       Canberra 1,004 (-14)       National 22,149 (-149)                HOUSE MEDIAN ASKING RENTS AND WEEKLY CHANGE     Sydney $820 (+$20)       Melbourne $620 ($0)       Brisbane $630 (-$5)       Adelaide $615 (+$5)       Perth $675 ($0)       Hobart $560 (+$10)       Darwin $700 ($0)       Canberra $680 ($0)       National $670 (+$4)                UNIT MEDIAN ASKING RENTS AND WEEKLY CHANGE     Sydney $750 ($0)       Melbourne $590 (-$5)       Brisbane $630 (+$5)       Adelaide $505 (-$5)       Perth $620 (-$10)       Hobart $460 (-$10)       Darwin $580 (+$20)       Canberra $550 ($0)       National $597 (-$)                HOUSES FOR RENT AND WEEKLY CHANGE     Sydney 6,197 (+313)       Melbourne 6,580 (-5)       Brisbane 4,403 (-85)       Adelaide 1,545 (-44)       Perth 2,951 (+71)       Hobart 398 (-13)       Darwin 97 (+4)       Canberra 643 (+11)       National 22,814 (+252)                UNITS FOR RENT AND WEEKLY CHANGE     Sydney 10,884 (-22)       Melbourne 6,312 (0)       Brisbane 2,285 (-54)       Adelaide 357 (-14)       Perth 783 (-14)       Hobart 129 (-14)       Darwin 132 (+6)       Canberra 831 (+15)       National 21,713 (-97)                HOUSE ANNUAL GROSS YIELDS AND TREND       Sydney 2.64% (↑)      Melbourne 3.33% (↑)        Brisbane 3.31% (↓)       Adelaide 3.53% (↓)       Perth 3.93% (↓)     Hobart 4.01% (↑)      Darwin 5.54% (↑)      Canberra 3.52% (↑)      National 3.34% (↑)             UNIT ANNUAL GROSS YIELDS AND TREND         Sydney 5.17% (↓)       Melbourne 6.19% (↓)     Brisbane 5.58% (↑)      Adelaide 5.94% (↑)        Perth 6.99% (↓)       Hobart 4.68% (↓)     Darwin 8.08% (↑)      Canberra 5.81% (↑)        National 5.78% (↓)            HOUSE RENTAL VACANCY RATES AND TREND       Sydney 0.8% (↑)      Melbourne 0.7% (↑)      Brisbane 0.7% (↑)      Adelaide 0.4% (↑)      Perth 0.4% (↑)      Hobart 0.9% (↑)      Darwin 0.8% (↑)      Canberra 1.0% (↑)      National 0.7% (↑)             UNIT RENTAL VACANCY RATES AND TREND       Sydney 0.9% (↑)      Melbourne 1.1% (↑)      Brisbane 1.0% (↑)      Adelaide 0.5% (↑)      Perth 0.5% (↑)      Hobart 1.4% (↑)      Darwin 1.7% (↑)      Canberra 1.4% (↑)      National 1.1% (↑)             AVERAGE DAYS TO SELL HOUSES AND TREND         Sydney 29.8 (↓)     Melbourne 31.7 (↑)      Brisbane 30.6 (↑)        Adelaide 25.2 (↓)       Perth 35.2 (↓)     Hobart 35.1 (↑)      Darwin 44.2 (↑)        Canberra 31.5 (↓)     National 32.9 (↑)             AVERAGE DAYS TO SELL UNITS AND TREND         Sydney 29.7 (↓)       Melbourne 30.5 (↓)     Brisbane 27.8 (↑)        Adelaide 22.8 (↓)     Perth 38.4 (↑)        Hobart 37.5 (↓)       Darwin 37.3 (↓)       Canberra 40.5 (↓)       National 33.1 (↓)           
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Disappointing Meta Earnings Sends Shudders Through Stock Market

Tech stocks have been ‘priced way beyond perfection’ and now face scrutiny as interest rates are poised to rise.

By Karen Langley
Fri, Feb 4, 2022 3:33pmGrey Clock 3 min

Facebook’s parent company shed more than $230 billion in market value Thursday, a one-day loss that is the biggest ever for a U.S. company and increases pressure on a stock market long powered by technology shares.

Meta Platforms Inc. (formerly known as Facebook Inc.) gave a disappointing financial forecast, helping the major indexes snap a four-session winning streak. The tech-heavy Nasdaq Composite index dropped 3.7%, its worst day since September 2020, while the S&P 500 fell 2.4%.

PayPal Holdings Inc. and Spotify Technology SA also spooked investors in recent days, when the payments giant lowered its 2022 profit outlook and the streaming company elected not to provide annual guidance. Both companies suffered sharp drops in their stock prices.

The setbacks reflect the increased scrutiny companies are under as major U.S. stock indexes remain near record highs and the Federal Reserve is preparing to raise interest rates for the first time since 2018. Rising rates tend to reduce the multiples that investors are willing to pay for a share of company profits, a trend that stands to mean pain for stocks already trading at lofty valuations. That has put heightened pressure on the companies to show their financial results justify their price tags. In recent days, several have fallen short, raising concerns among investors that further declines in major indexes could lie ahead.

“The level of forgiveness has gone down,” said Daniel Genter, chief executive and chief investment officer at RNC Genter Capital Management. “When boards come to their shareholders to confess their sins, they’re just not going to be pardoned with one Hail Mary.”

The Facebook parent company surprised investors with a deeper-than-expected decline in profit and a downbeat outlook. The company said it expects revenue growth to slow and shared that it lost about one million daily users globally. Shares declined 26%, their worst daily performance since they started trading in 2012.

The company’s challenges include a new ad-privacy policy from Apple Inc. that Meta expects to cost it more than $10 billion in lost sales for 2022. The requirement that apps ask users whether they want to be tracked limited the ability to gather data used to target digital ads, driving advertisers to change their spending.

Meta’s $232 billion drop in market value exceeds the record that Apple Inc. set in September 2020 when the iPhone maker lost about $182 billion in a single day, according to Dow Jones Market Data.

Some strategists said the recent slide in shares of speculative tech companies should serve to remind investors that a robust market rally relies on advances by a variety of stocks. And they warn they expect more big stock swings ahead at any hint of slowing growth.

“The market can’t just be driven by a small number of megacap companies or tech companies,” said Yung-Yu Ma, chief investment strategist at BMO Wealth Management. “There should start to be more of a recognition that it’s not going to be technology that leads us out of this pullback.”

Earnings season had been overshadowed until recent days as investors fretted over the Fed’s plans to raise rates. They sold stocks across sectors, helping to send the S&P 500 down 5.3% in January, its worst monthly performance since the March 2020 slump.

Results out of the tech segment haven’t been all bad. Google parent Alphabet Inc. reported robust sales growth and unveiled plans for a stock split this week, helping the company add more than $135 billion in market value Wednesday. And Amazon.com Inc. said after Thursday’s closing bell that profits nearly doubled in the holiday period, helping send its shares up about 15% in late trading.

Shares of Snap Inc. and Pinterest also got a big bump after hours. Snap posted its first quarterly profit, and Pinterest said it expects first-quarter revenue to grow sharply. All three stocks had declined in the regular session ahead of the reports.

Meta, PayPal and Spotify entered 2022 at rich valuations. While the S&P 500 ended December trading at 21.5 times its projected earnings over the next 12 months, Meta was trading at 23.6 times, PayPal at 36 times and Spotify at 543.9 times, according to FactSet. Spotify isn’t an index constituent. By Thursday, Meta’s multiple had pulled back to 18 times forward earnings, while PayPal traded at 25.6 times. Spotify, meanwhile, traded at 666.2 times, after analysts cut their earnings forecasts.

“Those stocks were really priced way beyond perfection,” Mr. Genter said. “People are saying, well, guess what, perfection is not here.”

PayPal lowered its profit outlook for 2022 and abandoned a target it set last year of roughly doubling its active user base. Executives said business this year will be pressured by forces including inflation, supply-chain problems, the Omicron variant and the runoff in government stimulus. Shares slumped 25% Wednesday in their worst selloff on record and continued sliding Thursday.

And Spotify, which is embroiled in a controversy over Joe Rogan’s podcast, said it added users but declined to give annual guidance, pulling shares down 17% on Thursday.

Broadly, the corporate earnings season has surpassed expectations. With results in from about half the constituents of the S&P 500, analysts estimate that profits from index constituents rose 29% in the holiday quarter from a year earlier, according to FactSet. That is up from forecasts for 21% growth at the end of September.



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Along with pay rates, the latest report from the ACSI shows bonuses are no longer based on exceptional results

By Bronwyn Allen
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The CEOs of the ASX 200 were paid a little less in FY23 compared to the year before, but bonuses appear to have become the norm rather than a reward for outstanding results, according to the Australia Council of Superannuation Investors (ACSI). ACSI has released its 23rd annual report documenting the CEOs’ realised pay, which combines base salaries, bonuses and other incentives.

The highest-paid CEO among Australian-domiciled ASX 200 companies in FY23 was Greg Goodman of Goodman Group, with realised pay of $27.34 million. Goodman Group is the ASX 200’s largest real estate investment trust (REIT) with a global portfolio of $80.5 billion in assets. The highest-paid CEO among foreign-domiciled ASX 200 companies was Mick Farrell of ResMed with realised pay of $47.58 million. ResMed manufactures CPAP machines to treat sleep apnoea.

The realised pay for the CEOs of the largest 100 companies by market capitalisation fell marginally from a median of $3.93 million in FY22 to $3.87 million in FY23. This is the lowest median in the 10 years since ACSI began basing its report on realised pay data. The median realised pay for the CEOs of the next largest 100 companies also fell from $2.1million to $1.95 million.

However, 192 of the ASX 200 CEOs took home a bonus, and Ed John, ACSI’s executive manager of stewardship, is concerned that bonuses are becoming “a given”.

“At a time when companies are focused on productivity and performance, it is critical that bonuses are only paid for exceptional outcomes,” Mr John said. He added that boards should set performance thresholds for CEO bonuses at appropriate levels.

ACSI said the slightly lower median realised pay of ASX 200 CEOs indicated greater scrutiny from shareholders was having an impact. There was a record 41 strike votes against executive pay at ASX 300 annual general meetings (AGMs) in 2023. This indicated an increasing number of shareholders were feeling unhappy with the executive pay levels at the companies in which they were invested.

A strike vote means 25 percent or more of shareholders voted against a company’s remuneration report. If a second strike vote is recorded at the next AGM, shareholders can vote to force the directors to stand for re-election.

10 highest-paid ASX 200 CEOs in FY23

1. Mick Farrell, ResMed, $47.58 million*
2. Robert Thomson, News Corporation, $41.53 million*
3. Greg Goodman, Goodman Group, $27.34 million
4. Shemara Wikramanayake, Macquarie Group, $25.32 million
5. Mike Henry, BHP Group, $19.68 million
6. Matt Comyn, Commonwealth Bank, $10.52 million
7. Jakob Stausholm, Rio Tinto, $10.47 million
8. Rob Scott, Wesfarmers, $9.57 million
9. Ron Delia, Amcor, $9.33 million*
10. Colin Goldschmidt, Sonic Healthcare, $8.35 million

Source: ACSI. Foreign-domiciled ASX 200 companies*

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