Global markets were mixed overnight, as US Markets (S&P 500 Index, +1.4%) rebounded from the previous sessions losses. Investors were in a more upbeat mood following the release of strong US employment and manufacturing data, despite lingering geopolitical issues.
The US tech index NASDAQ rose +2.2%, with chipmakers reporting strong gains – Nvidia surging +9.8%, Intel rising +6.9%, and AMD lifting +5.8%. Uber rose +5%, after reaching a deal to list all New York City taxis on its app. Other tech names also were also up strongly, while all sectors traded up, even energy stocks were up despite the price of oil slipping -1.8%.
European Markets edged lower (Stoxx 600 index -0.1%) on a mixed session as losses from retail stocks were offset by gains from telecoms. On Thursday Western leaders met at a series of summits in Brussels to discuss further responses to Putin’s war against Ukraine which weighed down on European market.
KMD Brands (KMD:NZX / KMD:ASX)
Kathmandu, now renamed to KMD Brands, shares were up +2.3% yesterday a day after delivering an understandably weak half year result, as investors look ahead to uninterrupted operations. Lockdown restrictions on both sides of the Tasman for a significant part of the half greatly impacted operations, while supply chain issues impacted freight costs and profit margins.
Sales were down -1% from last year to $407.3m, as a better performance from Rip Curl, Europe and online sales helped offset the impact of store closures. Lower sales, tighter margin from cost inflation and lower government support meant operating earnings (EBITDA) slumped -79% from last year to $56.1m and net loss of -$5.5m.
Looking ahead we remain upbeat on Kathmandu to turn things around under more normalised operations and benefit from increased travel. Now a larger and more diversified business, we maintain our BUY (High risk) due to its attractive valuation based on an upbeat outlook post covid.
Australia & New Zealand Market Movers
The Australian market edged higher yesterday (ASX200 index, +0.2%) for a third consecutive day.
Gains in commodity and utility stocks offsetting losses across most of the market, following a weak lead from Wall street, with technology and healthcare stocks being the worst performers.
A +5.6% rise in oil prices saw energy stocks trade strongly, Woodside Petroleum up +2.8% and Santos rising +1.5%. Major miners also doing a lot of heavy lifting as well BHP rising +1.8% and Rio Tinto up +2.1%.
JB Hi-Fi jumped +4.3% after reporting heightened consumer demand and strong sales growth in the third quarter. Crown edged +0.2% higher after avoiding having its license at its Perth casino cancelled.
The New Zealand market was down on Thursday (NZX 50 index -0.4%) weighed down by another -4.5% decline from Fisher and Paykel following its softer revenue guidance release on Tuesday.
A weaker lead from Wall street also spilled over as risk assets were also weaker Rakon (-2.9%), Pacific Edge (-2.2%) and Pushpay (-1.7%), on the flip-side lower risk stocks performed generally better over the day.
3 Things Markets will be Watching this Week
- Geopolitical risks remain extremely elevated with the Russia/Ukraine conflict.
- Highlights this week include CPI inflation data in the UK.
- Locally, earnings from Kathmandu and The Warehouse, Z Energy holding its Scheme meeting to vote on Ampol’s takeover offer.