Global markets sold off overnight as rising bond yields saw investors pull out of defensive sectors such as Healthcare and Telecommunications. There was also weakness in private US employment data figures, making the release of tonight’s monthly US payrolls (employment) data even more important.
Over the weekend investors will also be watching the G-20 summit in Hamburg, where US President Donald Trump is expected to hold his first meeting with Russia’s Vladimir Putin.
Stock in Focus: Costa Group (CGC.AX)
Costa Group has been one of our best performing Australian Agricultural stocks, with its shares more than doubling since January 2016. Costa Group is Australia’s leading producer in the fresh fruit and vegetables market, and we believe it offers an attractive way to gain exposure to growing food demand and health conscience consumers.
Costa has announced that it has agreed to buy (with Macquarie Agricultural Funds Management) Lankester Avocado orchards and packing operation for an undisclosed price, which is a significant Queensland grower. Costa has set its sights on becoming Australia's biggest supplier of avocados and Costa chief executive Harry Debney says the purchase is part of Costa's strategy to make avocados its fifth core product, alongside berries, mushrooms, citrus and glasshouse tomatoes.
We are currently BUY rated on CGC shares.
Members should look out for our full update on CGC to be released in our next weekly report.
Australia & New Zealand Market Movers
The Australian share market was slightly lower yesterday (ASX 200 index -0.08%) as the market struggled to find direction. Losses across the Big Banks and Resource sectors were offset by gains across defensive stocks which kept the broader market trading in a narrow range. In stock news, Coca Cola-Amatil has suffered a dual blow, losing a supply contract with Australian pizza giant Domino's to Pepsi, and failing to get its latest no-sugar offering onto Woolworths' supermarket shelves.
The New Zealand market moved higher on Thursday (NZX 50 index +0.45%) led by Comvita and Contact Energy, while Arvida and Metro Performance Glass dropped. Metro Glass held an investor day yesterday which initially saw a positive share price reaction before ending the day lower.
3 Things Markets Will be Watching this Week
1. How the US Technology sector trades following the recent pullback.
2. Minutes from the US Federal Reserve’s June meeting will be released on Wednesday.
3. Important US employment data is released end of the week.
Have a Great Day,
Team