Global markets were lower overnight as the Technology sector continued to slide with Microsoft the latest to disappoint. In fact, the Tech Nasdaq Index posted its third straight session of more than a -1% decline for the first time in 3-years, as disappointing forecasts from technology and internet companies spark growth worries.
Investors are also looking ahead to a number of central Bank meetings this week with the US Fed, Bank of Japan, and Bank of England all set to make monetary policy decisions. Closer to home, as we touched on yesterday local earnings season across Australia & NZ also kicks off this week.
Stock in Focus: BHP Billiton (BHP:AX)
The Australian market is trading at a decade-high, with a driving factor being a recovery in base metals prices and big movers such as BHP Billiton have made solid gains. We have been vocal supporters of BHP for some time now as our top ASX mining pick.
In recent news, BP has agreed to buy the US shale oil and gas assets from BHP Billiton for $10.5 billion. BHP has also reported a solid production update with record iron ore output for 2017/18. We continue to see BHP as a solid portfolio holding to gain exposure to the commodity space, particularly late in the economic cycle when commodity prices usually rise with inflation.
We currently have a BUY rating on BHP.
Members should look out for a full update on BHP to be released in our weekly report.
Australia & New Zealand Market Movers
The Australian share market was lower on Monday (ASX 200 index -0.35%) as the market retraced from a 10-year high. Mid-cap mining stocks weighted on the market following a weak set of numbers from short-seller target and graphite producer Syrah Resources. Telstra was also in focus after the telco announced a management shake-up. Ardent Leisure shares were lower as it said the recovery in patron numbers is taking longer than expected and the Dreamworld theme park on Queensland's Gold Coast continues to struggle following the 2016 tragedy that claimed four lives.
The New Zealand market started the week by selling-off (NZX 50 index -0.83%) with Kathmandu and Synlait Milk leading the index lower. Gentrack shares were slightly lower as it announced it has raised about $25.8 million in a stock offer to retail investors, in the second part of a $90 million capital raise to repay debt used for recent acquisitions. The stock was halted for most of the day as the company conducted a retail shortfall bookbuild at a clearing price of $6.84 per share. In other mews, Pacific Edge surged as Manchester Management Company, a US-based privately owned fund specialising in biotech and life sciences investments took a 1.7% stake in the company.
3 Things Markets Will be Watching this Week
1. US corporate earnings season continues as investors digest quarterly company profit announcements.
2. Locally, investors in Australia and NZ will also turn their attention to corporate profit announcements which kick off this week.
3. NZ employment figures are released on Wednesday, the US Federal Reserve makes an interest rate decision on Thursday morning (AU/NZ time).
Have a Great Day,
Team