US markets were closed for the 4th of July public holiday.
European Markets (Stoxx 600 index +0.6%) were up on lower volume due to the public holiday on Wall Street. Oil and gas stocks led gains as most sectors rose, apart from tech stocks. There has been little news and market movements have been modest apart from a notable lift in European bond yields. This reverses some of last week’s massive fall, against a backdrop of ongoing hawkish ECB-speak.
In other news, the WSJ reported that President Biden could announce a decision this week to roll back some tariffs on Chinese imports. It could include a pause on tariffs on consumer goods and launching a broad framework to allow importers to request tariff waivers. While reducing tariffs makes economic and political sense from an inflation fighting perspective there remains the competing political pressure to remain tough against China.
Sky City Entertainment (SKC:NZX /SKC:ASX)
Sky City missed out on the relief rally yesterday falling -4.1%, after its Adelaide casino was said to be facing an independent review. While it is early days we believe there isn’t anything material behind the review.
We remain BUY rated on Sky City due to its quality asset base which is well-priced and positioned to benefit from the recent reopening of international borders. We would like to highlight how well its shares have held up since February against the broader market sell-off.
Australia & New Zealand Market Movers
The Australian market (ASX200 index +1.1%) was up yesterday following Wall street’s positive tone on Friday.
All sectors were up led by energy real estate and consumer discretionary. Australian fund managers were a select few that ended the day lower Magellan falling -9.4% after its long-serving head of distribution announced its retirement.
Bubs shares rose +3.2% after entering a new supply agreement with two new retail groups in the US.
The New Zealand market (NZX 50 Index +1.0%) was up on Monday following a slight relief in markets globally.
Air NZ (+5.1%) and Auckland International Airport (+1%) were up benefiting from better traffic numbers and loosening border restrictions. Pushpay shares continued to slide as they are it yet to reveal details about any takeover bid.
3 Things Markets will be Watching this Week
- Highlights this week include US nonfarm payrolls (employment data), Fed meeting minutes and the latest inflation data in China.
- Locally, the RBA meets with a 50bp lift to the cash rate expected, which would take it to 1.35%.
- Home loans and building approvals in Australia are also due this week along with Goodman Property’s AGM and a Q2 sales update from Summerset.