Company Interview / Why did this company report today?

Mark Gardner from MPC Markets provided insights into the current market volatility and the reactions to recent economic events. Gardner highlighted the surprising early report from Audinate (ASX: AD8), which led to a sharp 40% drop in its shares, questioning the timing of the release during a particularly volatile market period. He discussed the broader market environment, noting the high levels of the VIX, indicating significant market fear, and mentioned the impact of Nvidia's (NASDAQ: NVDA) disappointing results on the overall tech sector.

Gardner also commented on Warren Buffett's recent move to increase cash holdings while reducing exposure to stocks like Apple (NASDAQ: AAPL), suggesting it's a smart move given the market's current overvaluation. He criticised the panic-driven calls for emergency rate cuts, arguing that the Federal Reserve should not act to save the stock market when it is still up significantly for the year.

Regarding the Reserve Bank of Australia (RBA), Gardner believes the central bank is relieved it doesn't need to hike rates, as doing so might have made them appear foolish. He expects rate cuts, but not until early next year, emphasising that investors should not expect emergency cuts due to market panic. He advised investors to reassess their portfolios, take profits where possible, and be cautious, suggesting it's a good time to hold cash and wait for more favorable market conditions before making new investments.

Full unedited transcript below:

0:00

Get across it all and what's been happening over the last few sessions with Mark Gardner from MPC markets. And Mark, you were just telling me as well, amidst all this volatility, ordinate has reported earlier than it needed to and it shares it down something like 40%. Yeah. Got a question. Management's decision to provide preliminary guidance. Um, the day after, you know, one of the worst days in the markets. Well, for some some of the indexes pretty much, you know, since well beyond Black Monday. So alternate, um, open at 650. And, um, obviously that's the danger of releasing the results weren't terrible. Um, I think, um, most of the metrics were up, you know, high 20%. Um, and they, I think they doubled, um, they doubled their gross profits and things like that. Um, outlook was a little bit soft, but obviously they were cautiously, cautiously positive. But in a market like a market like the market is today, where VIX is literally gone through, I think it peaked at 66 last night.

1:00

That's the third highest reading in history outside of the GFC. And I think Covid. Yeah. Um,

1:06

it's you know they're not obviously they haven't got someone in an investor relations there that's savvy to the market because it's not a you don't it's. Yeah. If you unless you have to release today I don't think you're releasing, but, um, obviously very lucky punters. Anyone who left who left a lazy bid in would have been set on the match at 650 and immediately bounced to nearly $10. Um, and then I think it's settled back down around nine, but obviously it's very volatile. That could have definitely changed in the last 5 or 10 minutes. But um, but yeah, that's just sort of like the way the markets are at the moment. It just is a really good example of, you know, even, okay, results can trigger really heavy market reactions. Yeah. Um, and the Nike's move yesterday was worse than black Black Monday in 87. Um, I'm pretty surprised we haven't bounced a little bit more today too. Why do you think that is? I've been trying to make sense of the fact that, okay, you've got Woodside out with that $2 billion spend, it's down 5%. You've got gold players under pressure. But other than that, I

2:06

can't see why we're not rebounding miners up as well. Yesterday, um, and looked at in the materials sector and the commodity sector, I mean it was largely already down. So um, in my mind, I think it's I think we're I mean, I'm not going to say we're cheaper because, look, we're nowhere near done with this yet. A spike in volatility like that, we may we may have a settling period, but it's normally a warning sign of, um, of a larger move. I certainly don't expect it to be bouncing back, particularly now that Mag seven earnings are largely out of the way. Nvidia has had a disappointing result with that chip being delayed because of design flaws, so it was down. I think it opened down nearly 14 or 15% last night, the year on the US open. Um, last night the Mag seven were down 1 trillion USD in market cap. Um, obviously they bounced over the over the session, which I think was a massive sigh of relief for investors globally because if they had capitulated, um, you know, we would probably be in a little bit of trouble. So but yeah, it's the context of these moves are,

3:06

you know, ignoring the fact that, um, you know, the market's the market's down. I mean, these are these are really significant moves. They're signs that the market was very complacent, that there's obviously a lot of leverage being taken out of the market. Um, that yen carry trade, which, um, a lot of people don't necessarily take paid too much attention to. But obviously Japan provides a lot of capital for the world. Yeah. Um, and, you know, I guess it's equivalent of if we're playing a game of musical chairs, Japan just removed half the seats and everyone's scrambling to get out. So it, um, and it really does have an effect. Some of the, some of the moves in the yen have been been incredibly significant. Where there's a there's quite a few bits and pieces out there on the yen carry trade. Um, from an educational standpoint, on social media at the moment. So as an investor's point of view, it's worth I mean, the horse has bolted now, but it's worth understanding why that why that was the trigger. Because realistically, that's a it's a very big move for no major catalyst. Um,

4:05

and payrolls were still 115. It wasn't a disaster. Yeah. I mean it's it's betting that this the fed has been too slow. But as you say, why has that exacerbated this selloff to that point, especially when you're seeing moves that we haven't seen since Covid, since Black Monday. Um, I'm also curious what you think from the world's savviest investor, arguably Warren Buffett, putting more into cash and getting out of the likes of Apple? Genius. Realistically, I think it was. It was a very smart time to be getting out. Apple's not involved in the I thematic. It's been dragged up on the bootstraps of Nvidia and Microsoft etc.. Um, they had I think we said on this we on the CRB last Wednesday, I mentioned that, um, you know, they've prepared everyone to buy the next iPhone upgrade that doesn't have a retrospective. They can't have AI on their phones unless they buy the new phone. Then they delayed the phone by two months. Um, there was a very mysterious, um, recovery in a sector I'd never heard of in their business and services. Um, that covered for that

5:05

iPhone. But I think that seemed to me a lot more creative accounting than anything else. But at the moment, Buffett's holding more T-bills than the Treasury is. So I think that's a fairly, fairly big indication. Um, and that news sort of came out over the weekend, which obviously triggered Apple's downfall. I think there's probably more pain for Apple. Um, it's old technology and, you know, there's only so many cameras you can put on a phone. Well, there's only so many phones that you need to write. Like just constantly updating. Yeah. Um, let's get to our RBA because it's really changed even since you and I and Nadine spoke last week on the Cob, we always knew August was going to be live, but that was more because of the inflation print putting away the likelihood of a hike. Now we're talking potential cuts. Yeah, I think the cuts thing is I think that's just an indication of how much people are panicking at the moment. Um,

5:57

Twitter was just alight with, you know, in stock investors who were clearly leveraged calling for emergency rate cuts last night. I mean, that's absolutely ridiculous. It's not the Fed's job to, you know, to be saving the stock market. And we're and we're what, about 10% from record highs. We're still up over 20% for the year. Um, that's that's just. Yeah, it's I don't want to swear on it, but that's. Yeah, that's as silly as that's really as silly as it gets. I mean, where, where all these issues are, there's, there was billions of dollars of inflows into an ETF. For Nvidia, for instance. It was three times leveraged. I mean, I think there was up to 2 billion inflows over a very short period of time. This is just an unwind of, you know, you can't have a party without a hangover. Um, I think it's ridiculous for investors to wave and entertain the thought. I don't think the fed is too slow. Um, inflation is still sticky. Um, the RBA will probably be seeing the largest sigh of relief in history now because it's just not in question for them.

6:57

They don't have to hike, and I don't think they wanted to hike because it would have made them look foolish. So, um, I think now we all come to amend rate cuts. I mean, they were the next move, in our opinion. Um, probably early next year. Um, yeah. Look, I don't I don't think it's not monetary policy to be emergency cutting because everyone gorged on leverage. Um, and the stock market is still up 20%. So big lesson out of these moves is to you've got to see the forest for the trees. These moves are they're big headlines. They're you know, um, the nightly news runs with 100 billion swaps. I know, and they never say when that money has been added to the market. No, they don't and they don't do it for the property market and things like that. So it's just a it's but it's really does, um, reinforce we we're always very well planned. We, we were worried about the payrolls number Friday. We bought a short hedge and, um, not enough in hindsight,

7:57

but, um, and we're fairly defensive. So overall we're we're not necessarily embracing the move, but you, you know, it um, I think the likes of CBA closing at a, you know, at a record high on the last day of July, I mean, it's still high today. He could have told you that, um, that that, you know, that that was ridiculous. So coming into earnings. But, um, but yeah, I mean, good time to review your portfolio and good time to, um, you know, to, to take stock because a lot of sectors have had really great runs. Consumer discretionary is really great run. I mean, the banks had a really great run. Like you know, there's no shame in taking a bit of profit and going to a bit of cash and waiting until things settle down. Do your best, Warren Buffett perhaps. Well, then you get to go shopping when the market's on sale.