Global markets were lower on Friday, as US markets (S&P500 -0.8%) fell after a disappointing November jobs report, as well as covid omicron variant concerns weighing down on the market in a highly volatile week of trading. Most sectors were lower with Consumer Discretionary, Technology and Financials leading losses.
While headlines and investors are trying to digest the implications of the new variant, in our view the larger issue facing markets appears to be the view of the Federal Reserve on inflation. Chair Jerome Powell commented during the week that the word 'transitory" should cease to be used as a descriptive term for inflation, and that a faster end to supportive conditions may be appropriate. US markets continue to expect a couple of interest rate hikes next year.
Stocks that had largely escaped the previous few days damage generally took a hit on Friday, but in most cases are still above levels of a month ago. An interesting counter example though is Cathie Wood's ARK, representing the more speculative end of the tech stock spectrum, lost around 15% on the week and is now -30% year to date.
European Markets (Stoxx 600 index -0.8%) with mining stocks leading losses and most sectors trading in the red.
Adveritas (AV1 :ASX)
Adveritas has been on a strong run over the last month, up +71% since our initiation report.
Since then Adveritas has confirmed full $5m was raised though rights issues and sentiment was helped by few insightful presentations and the company AGM presentation, which highlighted the importance the Google Cloud Marketplace.
We remain BUY rated on Adveritas as an exciting small-cap ASX stock to play the theme of advertising fraud & invalid web traffic.
Australia & New Zealand Market Movers
The Australian market was up on Friday (ASX 200 index +0.2%) but ended a volatile omicron induced sell-off week down -0.5%.
TPG fell -8.6% on reports founder David Teoh was looking to sell a significant trade. CSL fell another -2.5% on its takeover rumours of Vifor Pharma and $3-4 billion capital raise, however it is believed they are not the main party interested.
Novonix plunged -32.4% after the company responded to an ASX inquiring stating it was not aware of information that could explain the share price move.
The New Zealand market edged higher on Friday (NZX 50 index +0.1% )and despite the omicron driven volatility ended the week up +0.4%.
Fonterra shares dropped near a one-year low, down -1.4%, after the dairy cooperative announced a record high farmgate milk price payout guidance of $8.40 to $9.00/kgMS.
Napier Port shares rose +1.4%, despite being excluding from the NZX50 on December 20th, while Eroad fell -2% to take its place.
3 Things Markets will be Watching this Week
- Key events this week US and China CPI (Inflation) data, and trade Data from China.
- Developments around the Omicron variant of covid will be dominating headlines.
- Locally, the RBA meets to review its cash rate, earnings release from Metcash, and AGM’s held by Bank of Queensland and Pendal.