Global markets were mixed again overnight with the US (S&P 500 index -0.04%) market flat, while Europe and the UK edged lower and Asian stocks had a strong session.
Inflation data for January showed US core consumer prices were flat for a second consecutive month (and up 1.4% year on year), below expectations, which sent 10-year Treasury bond yields slightly lower ahead of a speech by Fed Chair Powell in the afternoon on the labour market. Powell continues to down-play the risk of rising inflation, saying the US Fed will let the economy "run hot" rather than risking raising interest rates too early. President Biden agreed to a US $75k income eligibility limit for stimulus cheques, helping boost support in Congress.
In stock news, Twitter climbed after reporting a jump in revenue while Lyft rallied as the co-founder said the ride-hailing company will “absolutely” turn a quarterly profit this year, and rival Uber was up ahead of its quarterly result.
Briscoes (BGP) shares were higher after reporting another solid sales update for its final quarter of the 2021 financial year. Fourth quarter sales for the group came in at $248.1m, up +18.3% on the same corresponding period last year, benefiting from Black Friday and strong December trading period, as consumers continue to boost retail spending well after the initial lockdown restrictions were lifted. Full year sales was $701.8m, up +7.5%.
With the lack of international travel, low interest rates and a booming housing market, local consumer spending is very strong.
We are currently HOLD rated on Briscoes (but BGP has been our preferred retailer) and will post a full report in our weekly.
Australia & New Zealand Market Movers
The Australian market was up yesterday (ASX 200 index +0.5%) buoyed by tech sector, particularly the buy-now-pay-later sector as Afterpay rose another +4.2%, with rivals all making sizable gains.
CBA fell -1.5% after the bank reported interim cash net profit fell -10.8% to $3.9 billion largely due to revenue falling -0.5%. Despite this most banks ended the day higher – and we remain positive on the sector, with most other major sectors also in the green.
Crown Resorts share price fell by more than -3% as it recommenced trading after the casino operator was deemed to be unsuitable to operate the new casino in Sydney.
Cloud technology business Megaport share price went up 7% after reporting its 2021 half-year result reporting its monthly recurring revenue (MRR) increased by 11% to $6.3 million, with annualised revenue also increasing by 11% to $75 million.
The New Zealand market was lower on Wednesday (NZX 50 index -0.8%) heading into earnings season as investors take a "wait and see" approach.
Sanford shares led the market lower down -5.1% as customs authority suspended imports from a Sanford site after it raised “a number of queries” following a video audit of Sanford's Havelock mussel processing facility. Sanford has lost its China export licnse for its Mussel plant.
Shares in Property for Industry climbed +0.7% after announcing the sale of its Carlaw Park property in Parnell, Auckland, to a private investor for $110m as it continues to divest non-industrial property.
3 Things Markets will be Watching this Week
- In terms of the week ahead, the US 4th quarter earnings season rolls on, with reports due from General Motors, Twitter, Disney and Coca-Cola among the notable mentions.
- The US CPI (inflation) report on Wednesday will also attract more than usual interest, given simmering fear of an uptick in inflation leading to higher interest rates.
- Earnings season in Australia starts later this week while NZ companies start to report on Monday.