Australia & New Zealand Market Movers
The New Zealand market (NZX 50 Index -0.8%) fell in the lead up to the release of the country’s inflation data, due today at 10:45 am NZDT.
Tower (+5.7%) surged after announcing its annual underlying profit was about NZ$40m in the year ended Sept 30, beating forecasts by ~30%, and improving on last year’s underlying profit of NZ$30.8m.
Air NZ (-1.3%) fell after offering up to $100m five-and-a-half year, unsecured, and unsubordinated bonds. According to the airline, the proceeds will be used for general business purposes including repayment of its AIR020 Bonds that mature on October 29.
Ryman Healthcare (-0.9%) held its investor day yesterday and noted that its new care homes will have a drastically smaller bed count, down to ~50 beds from 120+ in the past. Ryman points to government underfunding for aged care as the catalyst for this downshift.
The Australian market (ASX 200 Index -1.4%) fell in a broad-based sell off. Energy (-2.1%) and Materials (-2.1%) led all sectors down. Iron ore futures fell to $96.5 per ton, its lowest price since November 2021. Rio Tinto (-2.6%), BHP (-2.3%), and Fortescue (-1.2%) all fell on the day in response.
Tyro Payments (+8.7%) jumped after reports that Westpac (-0.3%) had tapped JP Morgan (+4.2%) to advise its takeover bid for the payment terminals firm. It is thought that NAB (-1.0%) and Commonwealth (0.8%) are also interested in developing bids for Tyro Payments.
Europe & US Market Movers
European markets (Stoxx 600 Index, +1.8%) rallied as investors celebrate the UK governments policy reversal. The UK’s new Finance Minister Jeremy Hunt announced that almost all the government’s ‘mini-budget’ tax cuts will now be scrapped. The pound (+1.5%) further strengthened on the news.
All European sectors advanced, led by Real Estate (+4.0%), Travel and Leisure stocks (+3.3%), and Banks (+2.3%).
US markets (S&P 500 Index +2.6%) rose sharply on Monday trading as investors hopes for earnings season perked up.
Bank of America (+6.1%) reported a smaller-than-expected -9.0% drop in quarterly profit, as its interest income helped offset a decline in investment banking income. Bank of New York Mellon (+5.1%) also posted better-than-expected result.
Shares of the online gaming company Roblox (+20.0%) surged after releasing its September metrics that showed daily active users were up 23% year over year.
Consumer Discretionary (+4.2%) led all US sectors into the green, followed by Real Estate (+3.9%) and Communication Services (+3.3%). Tech stocks (+3.1%) also advanced admirably. Two large components of the sector, Netflix (+7.0%) and Tesla (+7.0%), are due to report earnings this week.
Costa Group (CGC:ASX)
Costa Group shares plunged -13.4% yesterday, after the fruit and vegetable grower released a disappointing update, saying 2022 full year earnings would come in only a touch higher than the previous year. This implies a weak second half, driven by adverse weather conditions, lowering citrus crop quality and pack out rates. While the remainder of the portfolio berries, tomatoes and mushrooms are in line with expectations.
Given another disappointing announcement and the recent departure of their CEO, it is difficult to view the company favourably and for that reason we downgrade Costa down to a NEUTRAL and would no longer be buyers at the current juncture.
What Markets will be Watching this Week
Monday
CN Balance of Trade for September
Tuesday
NZ Inflation Rate for Quarter 3
AU RBA Meeting Minutes
Wednesday
GB Inflation Rate Year-over-Year for September
Thursday
AU Unemployment Rate for September
Friday
JP Inflation Rate Year-over-Year for September