Global markets were mixed overnight in muted trading as the US markets were closed for Martin Luther King Day.
UK Prime Minister Theresa May said overnight that she would try to break the deadlock over her Brexit deal by seeking further concessions from the EU on the Irish border and refuses to rule out a “no-deal” Brexit.
China's economy slowed to its lowest rate of growth since the global financial crisis in the fourth quarter with official gross domestic product up 6.4 per cent compared to a year earlier, although this was in line with economists' expectations. China looks to be facing headwinds from cooling global growth and the lagged impact of slower credit growth, however the markets seem well aware of this and share market prices across Asia were in positive territory yesterday.
Stock in Focus: Treasury Wine Estates (TWE:ASX)
Treasury Wine Estates (TWE) shares have started the year strong, jumping after it announced its earnings (EBITS) guidance for the first half of the 2019 financial year will be ahead of consensus forecasts. We have had a positive view on TWE for some time now, and it has been one of our best performing ASX stock picks as shown below.
The announcement proves some commentators wrong who have questioned the wine makers ability to deliver further growth given weaker macro-level data. TWE have acknowledged there is some volatility within their key China and US markets, and fortunately trading performance continues to remain positive and they are on track to achieve +25% growth on earnings for 2019 full year. We continue to believe TWE will benefit from demand as the Chinese consumer pallet evolves and as a beneficiary of a weaker Aussie dollar.
Members should look out for our full update on TWE to be released in tomorrow’s weekly report.
Australia & New Zealand Market Movers
The Australian share market was in positive territory once again yesterday (ASX 200 index +0.18%) as optimism of a resolution to trade tensions between the US and China offset data showing the Chinese economy grew at its weakest pace for 10 years. The major mining stocks had a solid day, while supermarket Coles has a strong trading session. In stock news, shares in WA-based mining services provider Ausdrill have leapt after it announced four new contracts worth a combined $171 million.
The New Zealand market continued to rally on Monday (NZX 50 index +0.56%) as investors picked through mixed local and international economic signals to focus on firms likely to do better in a slowing environment. Spark shares were the most traded and made slight gains. Cinema software company Vista Group International was the biggest gainer in the local benchmark. Late last year the firm settled new contracts with 123 Odeon Cinemas Group locations in Britain and Ireland.
3 Things Markets Will be Watching this Week
- US corporate earnings season continues this week.
- The Bank of Japan makes a policy decision on Wednesday, and the European Central bank will also make a decision on Thursday.
- China releases it 4th quarter economic growth (GDP) numbers on Monday.
Have a Great Day,