NZ
The a2 Milk Company Limited has advised that after market hours on Friday, 15 September it provided Synlait with written notice cancelling the exclusive manufacturing and supply rights enjoyed by Synlait in respect of stages 1 to 3 of A2’s current infant milk formula. We are pretty bearish on both A2 and Synlait…hard to see any value here…we think it feels a little cannibalistic here given that A2 owns part of Synlait…
Aus
New York private equity firm Paine Schwartz Partners will announce a revised takeover bid for Costa Group on Monday. It is unclear what the new price will be but considering Costa issued a profit warning last month, expectations are it will fall as much as 30 per cent below the previous offer. Hard to buy this at this level…
The Australian market (ASX200, +1.3%) was up on Friday, following a strong lead from Wall Street which saw tech names perform strongly.
However, given the US sharp close on Friday, ASX futures are showing it will open in the red, markets will be cautious in anticipation of central bank decisions from The Fed, Bank of Japan, and Bank of England.
US
The real winners of the ARM IPO…it’s advisers…$84mn in fees (!)
US market (S&P 500, -1.2%) was down on Friday, ending the week flat as the tech sector sold off heavily following indications of weak demand from TSMC.
US Bonds continued to rise, digesting inflation data with the Fed making an interest rate decision this week which will most likely be another pause – but investors should be watching closely the Fed’s commentary on outlook.
We anticipate another “data-driven outlook” but with a tight labor market, retail spending holding up and oil rallying over the last 2-months we feel more may be required once third-quarter data is released, as the US economy remains resilient. Oil continues to climb Brent Crude hitting $94/barrel, trading close to 12-month highs and well above its 10-year average.
Brent Crude Oil: 2015-2023
Week Ahead
Tuesday
RBA minutes released
Wednesday
UK and Canada Inflation Data
Kathmandu Brands earnings
Thursday
US Fed Interest Rate Decision
NZ GDP Data
Friday
Bank of England Interest Rate Decision