Pavan Sharma

US markets (S&P 500 Index 0.0%) were closed on Monday in observance of Labor Day. However, US Futures (S&P 500 Index Futures +0.3%) are currently trading slightly higher in anticipation of Tuesday’s opening. European stocks weaker as energy crisis continues to dominate headlines (Stoxx 600 Index -0.6%) as euro gas futures jumped +15% while the Euro fell through 0.99 versus the US dollar for first time in 20 years. Russia’s Gazprom announced that they would be indefinitely halting gas flows to Europe via the Nord Stream 1. Putin’s spokesperson said there would be no resumption in gas supply until sanctions are lifted. The loss that was incurred in the Stoxx 600 could have been worse if not for the gains made in energy sector stocks (STOXX 600 Energy +2.2%). 

Shares in data centre operator Next DC (NXT) fell heavily after delivering their 2022 full year result, the selling not helped by a broader tech sell-off for the week. Despite delivering a solid result on the top end of its previous guidance. Revenue rose +18% from last year to $291m and underlying operating earnings (EBITDA) increased +26% to $85m. The company experienced strong growth and ramped it its investment in expanding its installed capacity. Looking ahead, Next DC expects the growth to continue strongly into 2023, with revenue expected to rise +17% to 22% from last year, while operating earnings with grow by +12% to +17% softer than what the market had anticipated given. 

We initiate coverage of Walt Disney Co (DIS) with a BUY rating. The company hardly needs an introduction; its brands are amongst the most well-known in the world, from Mickey Mouse to Marvel and Star Wars. Its empire spans across several sectors — television and movies; sports (ESPN); parks (Disney World) and cruises. The company is a savvy aquirier of valuable assets, including Capital Cities/ABC, Pixar, Star Wars and the bulk of 20th Century Fox. There are few brands which can hold a candle to Disney. In terms of brand value it is perhaps only surpassed by Coca-Cola and Apple. The bulk of the company’s revenue comes from media (~2/3rds) and the remainder from parks and cruises.

US markets (S&P 500 Index -1.1%) fell on Friday, ending the week down -3.3% and marking its third weekly decline as a robust job report confirmed the recent market fears that the Fed would keep aggressively hiking interest rates. The ‘goldilocks’ nonfarm payrolls report showed some moderation in wage pressure and a surprise increase in the unemployment rate – August saw 315,000 new jobs created, a touch below 318,000 expected by the market. This saw the market increase the probability the Fed would raise its base interest rate by +75 basis points at its next meeting later this month. All sectors sold off for the day, except for energy. Tech shares were heavily hit again with the NASDAQ Index down -1.4% suffering its 6th consecutive daily loss.

US markets (S&P 500 Index +0.3%) rose in the final hours of trade overnight., recovering from a loss and snapping up a four-day losing streak. Energy and tech shares were the only sectors in the red, with the NASDAQ Index down -0.3% logging its first 5-day losing streak since February. Chip maker Nvidia fell -7.7% after the US government announced it would need special government licenses to sell two of its advanced semiconductors to Chinese customers. European markets (Stoxx 600 Index, -1.8%) fell extending losses, with all sectors in the red, Travel and Leisure stocks leading the decline.

US markets (S&P 500 Index -0.8%) fell for the fourth straight day on the last day of August. Wall Street markets moved approximately 4.0% lower over August, after scrubbing gains made in the first half of the month.  Markets are now under no illusion that the US Federal Reserve will not waiver in its commitment to raising rates at its current pace. The Feds sentiment seemingly holds regardless of whether the US is entering an official recession or not.  Technology stocks bucked the overall trend and helped the markets from registering an even larger loss. Meta booked a 3.7% gain, but was beat by two Chinese-based companies, Pinduoduo and Baidu, climbing 7.2% and 4.6%, respectively.

Oil and LNG producer Woodside Energy rose to a fresh 3-year higher after announcing a bumper dividend for the first half of the 2022 financial year. Net profit after tax jumped 5-fold to $1,640m, benefiting from higher oil and gas prices (double the same corresponding period last year) and a +19% increase in production volumes which included one full month of production from merged BHP assets. Woodside paid out an interim dividend of US$1.09 per share and now has a strong balance sheet following strong cash generation over the half.

Sky City shares were down when it released its 2022 full-year result, which came in as expected capping off another challenging year greatly impacted by last year’s lockdown. Normalised operating earnings (EBITDA) came in at $138m, while fourth-quarter gaming data showed strong recovery – with fewer operating restrictions. SKC’s balance sheet remains strong against a quality portfolio of assets, with Sky City guiding 2023 operating earnings (EBITDA) to be inline with pre-covid levels ~$300m.

US markets (S&P 500 Index -1.1%) fell for a third-day in a row as ‘good’ jobs data translated into bad news for stocks – as it gives the Fed added capacity to raise interest rates higher to combat inflation. US Jobs opening data showed 11.2m available vacancies, 800k stronger than expected, while US consumer confidence came in stronger than expected. Markets will also be watching key non-farm payrolls employment data out on Friday, with a strong print meaning more room for the Fed to lift rates and keep them higher for longer. All sectors ended in the session in the red, with energy being hardest hit as the price of oil slipped. European markets (Stoxx 600 Index, -0.7%) closed lower, erasing earlier gains, on deep recession fears induced by a spike in energy prices, coupled with a hawkish outlook from the ECB. Inflation data in Germany was high reaching a 40-year peak, in line with expectations rising +8.8% year on year.