CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Australian earnings preview Rio Tinto UK

The Covid-19 pandemic struck shortly after the February reporting season concluded. Since then lockdowns, implementation of travel restrictions, and a sharp rise in unemployment have dominated the economic landscape.

Many of Australia’s largest companies have been forced to the market to raise capital to shore up balance sheets. While others have been forced to defer, slash, or even cancel altogether the attractive dividend payouts that investors and retirees have come to rely upon.

Some companies have been able to weather the storm better than others, including iron ore producers Rio Tinto Ltd, Fortescue Metals Group Ltd. and BHP Group Ltd. who have benefitted from resilient demand from China as iron ore from rival suppliers in Brazil has been disrupted by Covid-19.

Investors will be able to get a better gauge on the outlook from this sector from Rio Tinto's half-year earnings report to be delivered on the 29th of July at 4.15pm Sydney time or 7.15am London time.

Rio Tinto half year earnings preview:

Rio Tinto Group is the world's second-largest metals and mining corporation, behind BHP, producing iron ore, copper, diamonds, gold, and uranium.

Iron ore typically accounts for 80% of Rio Tinto’s earnings and robust demand for iron ore from China has helped offset a sharp fall in industrial and economic activity in other regions as a result of the coronavirus pandemic.

The pandemic is expected to result in a sharp fall in Rio Tinto’s half-yearly earnings reported next week. However, with the market now more interested in the post coronavirus recovery punctuated by strong shipments and a rally in the price of iron to near U.S $110/ton, it is expected investors will mostly look through soft half yearly numbers and focus on full-year earnings.

Rio Tinto’s full-year earnings are expected to remain broadly flat in FY 2020 at around US$43bn, a remarkable result under the circumstances. Earnings per share (EPS) is expected to fall from US$636.3 cents per share in 2019 to around US$620.00 cents per share in 2020.   

Technically, Rio Tinto has found the layer of resistance near AU $108.00 formidable over the past 12 months and this remains the key resistance level to keep in mind. While on the downside, dips are likely to find support initially at near term support at AU$98.00, before medium-term support at AU$95.00.

Source Tradingview. The figures stated areas of the 23rd of July 2020. Past performance is not a reliable indicator of future performance.  This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

© City Index 2024