Global markets were mixed overnight on a quiet day of trade. US markets (S&P 500 Index) were basically flat as investors wait for the key jobs report due on Friday, and inflation data due next week for the month of July.
Economists estimate the US will add 258,000 jobs in the month of July, and that the jobless rate will remain flat at 3.6%. Energy was the worst performing sector overnight as the price of oil fell below $90/barrel for the first time since February on fears of the global economy entering into a deep recession, further exasperated by growing geo-political tension between China and the US, as China commences military drills near Taiwan.
European markets (Stoxx 600 Index +0.2%) edged higher as gains across travel and leisure stocks were offset by losses for oil and gas stocks.
The Bank of England (BoE) raised its cash rate by 50 basis points to 1.75%, which was widely anticipated. The central bank expects the UK economy may enter into a recession in the fourth quarter of this year and anticipates 5-consecutive quarters of shrinking economic activity.
Briscoes Group (BGP:NZX)
Briscoes Group shares edged up +0.2% yesterday after providing a trading update and upbeat guidance for the remainder of the year.
Sales for the first half of 2022 financial year (ending 31 July 2022) came in at $367.9m, up +2.7% from last year a strong comparable result despite the challenges in the current year being harder hit by covid restrictions, up +21.4% from the first half of 2019.
Looking ahead Briscoes expects 2022 full-year net profit to be above last year’s profit of $87.9m .
We are still Hold rated on Briscoes, as we believe the retailer may struggle over the medium-term given the backdrop of a bleak economic outlook.
Australia & New Zealand Market Movers
The Australian market (ASX 200 Index) was flat on a mixed day of trade.
A rebound in tech shares following a strong lead from Wall Street, was offset by the ASX’s two major commodity-facing sectors materials and energy which fell on softening commodity prices.
The New Zealand market (NZX 50 Index, +0.2%) edged higher on another quiet day of trade.
A2 Milk shares rose +2%, extending its weekly gains following the possibility of gaining FDA approval to sell its infant formula in the US. Fletcher Building edged +0.2% after the Commerce Commission said there was no blame on Fletchers for the recent spike in building products.
3 Things Markets will be Watching this Week
- US Corporate Earnings continue, with nonfarm payroll (employment) data in the US out later in the week.
- The Bank of England’s rate decision and PMI manufacturing surveys across the globe.
- Locally, reserve Bank of Australia’s cash rate decision.
