Global markets were mixed overnight, as European and Asian markets sold off, while shares on Wall Street Traded higher.
Positive sentiment during the US trading session was driven by further indications that President Donald Trump's tax-cut plan may get enough support for passage. The market is pushing higher as the tax reform gets closer to becoming a reality. As we have discussed previously, major tax reform will clearly be a massive stimulus for businesses and the US stock market, and we are watching developments as they unfold.
November has been another strong month for share market returns, with most markets moving higher and several major market indices hitting new all- time highs. Closer to home, the Australian market managed to end November with a +1.0% gain despite selling off yesterday, while the NZ market hit a fresh record moving +0.5% higher over the month.
Stock in Focus: Green Cross Health (GXH:NZ)
Medical services provider GXH posted a 16% decline in first-half profit earlier this week, mainly reflecting a one-time gain in the year-earlier half, while sales rose 6.9%.
Looking at some of the details, profit was $8.8 million in the six months from $10.5 million a year earlier, while operating revenue rose to $254 million from $238 million (the year-earlier profit included a one-time fair-value gain of $2.8 million). GXH announced an interim dividend of 3.5 cents per share.
GXH has a network of Unichem and Life Pharmacies that represents by far its biggest division, a medical division, and a community health division. We hold a positive stance on health care services generally, and we are watching GXH’s shares with interest as they have trended lower this year.
We currently have a HOLD rating on GXH.
Members should look out for a full update on GXH to be released in our weekly report.
Australia & New Zealand Market Movers
The Australian share market was lower yesterday (ASX 200 index -0.69%) following the announcement of a royal commission into the finance industry, with banks and insurers hit by the news. In stock news, Bank of Queensland also updated investors on Thursday at its annual meeting, saying moderating house prices across Australia's east coast are welcome but the institution is wary of risks in Brisbane's oversupplied apartment market.
The New Zealand market was higher yesterday (NZX 50 index +0.55%) on a day when turnover topped $1.4 billion, with trading dominated by Fisher & Paykel Healthcare and Contact Energy due to their reweighting in MSCI indexes. F&P Healthcare shares rose with $702 million of stock changing hands as it entered a key MSCI index, while some $410 million of Contact traded as it left and the share price fell. When a stock is included it means certain index-tracking investors, such as passive exchange-traded funds, have to buy the shares, with the reverse also true when a firm leaves it.
3 Things Markets Will be Watching this Week
1. The US Senate Banking Committee holds a hearing on Tuesday to confirm the nomination of Jerome Powell to succeed Janet Yellen.
2. US economic data – with GDP released Thursday and manufacturing data at the end of the week.
3. US Politics with Tax Reform taking centre stage.
Have a Great Day,
Team