Global markets sold off overnight, US Treasuries rallied the most since Brexit, and volatility spiked higher as the turmoil surrounding the Trump administration roiled financial markets around the globe. We noted just yesterday that the US market had been unusually calm, and this calm patch was broken yesterday as the US market fell nearly -2%, the biggest daily fall in months.
The sell-off has been driven by controversial reports regarding the conduct of US President Donald Trump which allege he asked then-FBI Director James Comey to end a probe into the White House's former national security adviser, and raised questions over whether obstruction of justice charges could be laid against Trump.
Concerns around US President Donald Trump's administration hit investor sentiment, and at the very least if Trump is preoccupied defending himself (and if it goes a lot further), then any hope of his pro-growth legislative agenda being implemented in a relatively quick manner is going to be reduced.
Closer to home, in stock news shares in Fisher & Paykel Healthcare (FPH.NZ / FPH.AX) were higher yesterday as competitor ResMed dropped one of its legal complaints against FPH in the US.
Stock in Focus: Fisher & Paykel Healthcare (FPH.NZ / FPH.AX)
Fisher & Paykel Healthcare shares jumped on news that health appliance firm ResMed dropped a complaint against Fisher & Paykel Healthcare at the US International Trade Commission. ResMed said it still plans to replace the complaint with a new action and is still pursuing its patent dispute with the New Zealand maker of breathing masks in several other jurisdictions.
FPH stated that "We are pleased with today’s developments. As we said when these proceedings commenced in August last year we are confident in our intellectual property position... Should ResMed request that the ITC conduct another investigation, we will vigorously contest this and we remain confident in regards to future proceedings."
We have noted that while FPH is reaching record heights in terms of earnings, the litigation battle with ResMed does create uncertainty and is likely to remain an overhang on the stock for some time.
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