US markets (S&P 500 Index + 1.0%) recorded its fourth consecutive positive session. Energy was the best performing sector, followed closely by Technology, but the rally occurred across was broad.
Fortinet (+4.2%) and Apple (+3.9%) were among the top performing Technology stocks, the latter boosted by reports that the new iPhone 14 presales are better than expected.
European markets (Stoxx 600 Index, +1.8%) continued last week’s momentum on Monday, rising above their 50-day moving average and booking the largest three-day rally in two months. All sectors closed Monday in the green, led by Retail (4.5%) stocks.
Walt Disney Company (DIS: NYSE)
Disney (+1.0%) climbed on Monday after comments from CEO Bob Chapek over the weekend at the company’s D23 Expo.
For one, Chapek has reaffirmed the value that ESPN adds to the company, dismissing activist investor Daniel Loeb’s suggestion that it be spun off.
Chapek’s dismissal echoes our analyst’s report on the value of spinning off the “consistently profitable” ESPN. Read more about the other activist demands that Disney is currently contending with in our latest report on Disney and an evaluation of their individual merits.
We initiated coverage of Walt Disney with a BUY rating on September 5. Its empire spans across several sectors, including television and movies; sports (ESPN); parks (Disney World) and cruises. The bulk of the company’s revenue comes from media (~2/3rds) and the remainder from parks and cruises.
We see Disney as a defensive stock with very strong pricing power. The company is trading at post-March 2020 (Pandemic) levels and we think this is a good entry point to purchase a piece of one of the world’s most enduring brands.
Australian & New Zealand Market Movers
The Australian market (ASX 200 Index, +1.0%) advanced on Monday to book it third straight positive day.
Iron ore (+3.0%) climbed back above $US100 per ton, helping Mining and Metals (+2.2%) climb on Monday. Fortescue (+3.3%) and BHP (+3.5%) both climbed more than 3.0%, beating the sector index.
The New Zealand market (NZX 50 Index, +0.5%) rose 55.44 points on Monday. Low trading volumes might be expected until Thursday when New Zealand releases its latest GDP data. In other news, the NZ Government announced the end of its Covid-19 Protection Framework – aka traffic light system – along with many related public health restrictions.
Infratil (-0.5%) led trading volume on Monday but fell to $9.29 per share.
Synlait Milk (+1.2%) rose on the day after announcing that its A2 infant formula registration in China was renewed until February 2023. Synlait’s manufacturing partner A2 Milk (+2.9%) booked the larger gains.
What Markets will be Watching this Week
Monday
/
Tuesday
US CPI (Inflation) Data for August, James Hardie investor Day, NZ August housing data from REINZ
Wednesday
US PPI (Producer Inflation), Data, UK CPI and PPI data
Thursday
US retail sales data, Australian employment figures and NZ 2nd Quarter GDP data
Friday
Eurozone CPI data.