Pavan Sharma

The New Zealand market (NZX 50 Index, +0.8%) rose on Friday on the back of gains by Energy generators, including Mercury (+4.1%), Contact (+3.1%), and Meridian (+2.2%). 

We initiate coverage of Costco (COST) with a BUY (underweight) rating. The company is engaged in the sale of groceries, home goods and apparel via a membership programme. It has 842 warehouses across the world, and 118.9M members.

WarnerBrothersDiscovery (WBD) reported disappointing earnings amidst a difficult turnaround story. The company’s revenue came in below the street’s expectations, at $9.82B vs. and expected $10.36B. Per share loss was 95 cents, mainly due to write-downs which management had previously signaled.

Technical Analysis: We can see Elders had a strong run post covid. Elders managed to buck market trends earlier this year jumping on strong earnings upgrade in March and May 2022 while the rest of the market was sold off, it shows the stock is overbought above $13.00 level, with support at the $11.50 tested a rebounded numerus times.

Elders plunged 22.9% after reporting its annual results despite the result coming in on the top end of guidance, the planned departure of its CEO Mark Alisson and uncertain outlook worried investors. Elders revenue rose +35% and operating earnings (EBITDA) increased +39% and the company were able to declare a 56 cent per share final dividend, an increase of +33% from last year. 

US markets (S&P 500 Index -0.6%) fell overnight as interest rate induced recession fears grip the market causing almost all sectors to fall.   Investors digest comments from Fed officials “the policy rate is not yet in a zone that may be considered sufficiently restrictive” – reiterating a much more hawkish stance to fight against inflation. He told reporters after a speech that in the past he had said the Fed Funds rate needed to get to 4.75-5% but he now thought 5-5.25% was needed and “that’s a minimum level”.

The New Zealand market (NZX 50 Index, 0.1%) was a touch lower on Wednesday as investors brace for more corporate earnings.  Pacific Edge was up +3.1% with investors eagerly wait for their result next week but more importantly, provide light on whether Medicare provider Novitas will continue using Pacific Edge’s Cxbladder tests.

The New Zealand market (NZX 50 Index, +0.1%) ended flat on Tuesday, while Communication Services (-0.6%) and Real Estate (0.4%) took a hit, with Kiwi Property Group (-2.8%) and Investore Property (-1.3%) leading losses for the latter.