Key takeaways:

• Investors are monitoring signs that net interest margins may have peaked among the major banks

With investors paying close attention to earnings commentary from major names such as CBA, an uncertain economic outlook has weighed on the ASX this week.

Which shares excelled?

Diagnostics stocks bounced back after a setback the week prior, with Sonic Healthcare (ASX: SHL) and Healius (ASX: HLS) among the week best performing stocks. That followed an earnings release by Sonic Healthcare, with the company informing the market that it is seeing momentum increase as far as organic revenue growth across its base business. 

In January, the company revenue was 10% higher than pre-pandemic levels. Pleasingly for shareholders, business margins have also fared well, with management placing a priority on efficiency and automation to keep costs in check. Meanwhile, in terms of its outlook, SHL expects growth to come from genetic testing and hospital services, while it is actively monitoring acquisition opportunities.

Packaging solutions business Orora (ASX: ORA) is also on the winners list this week after the company indicated it has seen prolific growth over recent months. With changing consumer preferences playing a role, the company boosted its output for can volumes. In total, volume growth was over 10% in the first-half of the year, with further investment in capacity to keep up with demand. Across the period, net profit after tax rose 7.8% to $108 million.Fund manager Magellan Financial Group (ASX: MFG) is heading in the right direction after indicating it is making progress to restore funds under management. Although the business took a major hit, with adjusted revenue and adjusted net profit after tax down 49% and 60% respectively, the business is reportedly making inroads into simplifying its structure. In what was a good sign for investors, operating expenses tied to the company were reaffirmed in the previous guidance range of $125 million to $130 million. One business ending the week on a high note is QBE Insurance (ASX: QBE). The company reported a 5.2% increase in adjusted cash profit after tax, while adjusted gross written premiums surged by 13% compared with FY21. On the back of the results, and despite a loss across its investment portfolio, the company lifted its final dividend by 57%, with shareholders set to receive a 30 cent fully-franked dividend.Investors have also warmed to names such as G.U.D Holdings (ASX GUD), Coronado Global (ASX: CRN), Stanmore Resources (ASX: SMR), Sims (ASX: SGM), Nanosonics (ASX: NAN), SG Fleet (ASX: SGF), and Graincorp (ASX: GNC).

Which shares dragged on the market?

By far the highest profile stock featuring among the underperformers, Commonwealth Bank (ASX: CBA) came unstuck after reporting its half-year earnings. Although the nation largest lender reported record profits, the business is now dealing with an uncertain outlook.

On the one hand, shareholders appear concerned the bank margins may have peaked. That follows signs net interest margins fell in the final two months of the calendar year, having charted a high in October. At the same time, intense competition in the mortgage sector is playing a role. There was also an increase in the company loan impairment expenses, up $586 million, with expectations that borrowers will face greater difficulties meeting repayments as interest rates rise.

Other headwinds include a slowdown in business credit growth, and falling property prices, with the bank expecting global economic growth to slow during 2023. Management also indicated that there may be further headwinds from deposit switching in the second half of the financial year, which is something that could continue to restrict margin growth.

Casino operator Star Entertainment Group (ASX: SGR) continues to feel the heat, with the stock crunched this week after it provided the market with a trading update. The company first-half earnings were dealt a blow following a number of headwinds, including competition from Crown Sydney, remediation costs, and the impact of a regulatory review. 

At its key flagship casino, Star Sydney, revenue fell 13.5% versus pre-COVID levels, offsetting growth in other regions such as Brisbane and the Gold Coast. With the company facing ongoing compliance costs, mainly tied to consulting expenses, the company outlook is for underlying EBITDA of between $195 million and $205 million, excluding significant items such as fines and legal costs. 

Across the full year, momentum is expected to slow even further in the second half, while management has taken an axe to the value of the company Sydney operations, forecasting a non-cash impairment charge of up to $1.6 billion in light of regulatory and government changes.

Diversified financials business AMP (ASX: AMP) has had a week to forget, with its shares on the back foot following an earnings update. Underlying NPAT slumped 34% to $184 million, with assets under management in the company wealth management division decreasing by 13% to $124.2 billion following market volatility. Falling net interest margins across its banking division also weighed on earnings, despite efforts being made to control costs and divest non-core functions of the business.It been a bad week for battery metals stocks, and Vulcan Energy Resources (ASX: VUL) is just one name that has stumbled. Earlier this week the company released the DFS results for its Zero Carbon Lithium Project. While the miner now anticipates producing as much as 60% more lithium hydroxide monohydrate than previously estimated, costs have significantly increased. From 700 million euros in capex, Vulcan now expects to spend just shy of 1.5 billion euros, and opex costs have risen from 3,139 euros per tonne to 4,359 euros per tonnes.Shares in Brainchip (ASX: BRN) hit a new 52-week low as the AI chip manufacturer fell out of favour. Surprisingly, there was no real news out of the company this week, and the ASX even tried to get to the bottom of the issue by querying the company. Nonetheless, unable to explain the move, and with the volume of shares behind the sudden drop nearly three times as much as normal, it appears at least some big holders have pivoted out of the stock.Some other stocks underperforming this week include Lake Resources (ASX: LKE), Sayona Mining (ASX: SYA), Mincor Resources (ASX: MCR), Weebit Nano (ASX: WBT), and Perenti (ASX: PRN).

We'll be back next week with another Weekly ASX Trading Wrap Up - until then, have a great week!