Apple Lifts Wall Street | Treasury Wines Tumbles

31 January 2020

​Global markets ​trended higher overnight, ​as Wall Street rallied on strong company earnings – ahead of the US Federal Reserve's latest policy decision this morning. Apple made solid gains after the iPhone maker reported earnings for the holiday shopping quarter above analysts' expectations, even as it braced for more disruptions in virus-hit China.
 

Stock in Focus: Treasury Wine Estates (TWE:ASX)

TWE shares tumbled yesterday to 2017 levels yesterday after warning late on Tuesday that a US business downturn ​(US wine over-supply) ​had prompted a downgrade of its full-year forecasts and a softer-than-expected first-half profit.

The Aussie wine group is forecasting ​operating earnings ​growth of 5% to 10% in ​the 202​0 ​financial year ​compared to its previous 15% to 20% guidance range. It also revised its ​2021 forecast growth to a 10% to 15% range​.​ ​T​he guidance ​does ​not incorporat​e ​a possible impact from the coronavirus on Chinese consumer purchasing patterns​ – critical to the success of the Penfolds brand is its “apparent scarcity.” 

​This was clearly a very dissapointing update​, although our initial vew is that the share price move now refelects the bad news-flow. 

We currently have a ​BUY​ rating​ on TWE​
Members should look out for a full update on ​TWE to be released in our weekly report.

 

   
Australia & New Zealand Market Movers

​​The Australian market ​rebounded on Wednesday (ASX 200 Index ​+​0.​53​%)​ and the ASX remains on track for a very strong January. ​The odds of an interest rate cut next week by the RBA slumped to 10% after fourth-quarter inflation rose at a quicker-than-expected pace. oOh!media shares dropped after telling investors that founder Brendon Cook will step down as chief executive during 2020. It also confirmed that its full-year ​operating earnings would be at the lower end of $138 million to $143 million.

Many mining companies were busy updating investors on fourth-quarter operations. Iluka Resources ​made gains after advising investors that total mineral sands production reached 273,000 tonnes in the fourth quarter​. O​Z Minerals ​was higher after fourth-quarter copper production rose 16% ​to 28,659 tonnes from 24,663 tonnes in the previous three months.​ ​Evolution Mining shares fell​​ after producing 170,890 ounces of gold in the fourth quarter of 2019, down from 191,967 ounces in the third quarter.

 
The New Zealand market ​was a touch lower yesterday (-​0​.​1​3%)​ ​despite a rally in the Asian markets. SkyCity Entertainment Group led the market lower, as investors continue to assess the economic impact of the coronavirus outbreak.​ ​Oceania Healthcare halted trading at $1.25 after cornerstone shareholder Macquarie Group announced it ​is looking to sell its 40.94​% ​stake in the residential aged care and retirement village services.
 
 

3 Things Markets Will be Watching this Week

  1. ​US Earnings​ get into full swing with a number of market heavyweights reporting profits.
  2. Coronavirus​ Headlines.​
  3. The US Federal Reserve makes an interest rate decison on Thursday

Have a Great Day,
 

Team

Apple made solid gains after the iPhone maker reported earnings for the holiday shopping quarter above analysts' expectations, even as it braced for more disruptions in virus-hit China.

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