Global markets were higher overnight, as US markets (S&P 500 index +2.5%) rebounded as there was a break in heavy selling following the market’s worst weekly decline since 2020.
Most sectors traded higher, with energy and consumer discretionary leading gains. Tech shares also rebounded strongly with the NASDAQ up +2.5%. Many investors still believe this is not yet the bottom, given these bounces are normal occurrences in a bear market and there has been no positive news or catalyst to drive a recovery yet.
Closer to home, there was no market reaction to Westpac’s quarterly measure of NZ consumer confidence which plunged to 78.7 in the second quarter to a record low in the survey’s 34-year history, taking it below levels seen during previous recessions. For that we can blame surging inflation, which is eating into households’ purchasing power. Add in a dose of higher interest rates, with more to come to “solve” the inflation problem, and the recessionary risk that overhangs the economy is plain to see.
Adveritas (AV1:ASX)
Shares in online ad fraud protection company Adveritas jumped +10.3% yesterday after delivering a solid update.
Annualised revenue for the June quarter came in at $2.45m, up +34% over the previous (march 2021) quarter, and more than double (+140%) the same corresponding period last year.
The increase was underpinned by new customer contracts via direct sales and Google Cloud Marketplace. Primarily focused on google ad words, Traffic Guard is now entering Meta (Facebook) advertising market for Pay Per Click protection with the first clients undertaking beta trails.
We are Buy rated on Adveritas although note the small size and volatility of the stock means it is higher on the risk/reward spectrum.
Australia & New Zealand Market Movers
The Australian market was up yesterday (ASX200 index -+1.4%) ending a 7-day losing streak., as dip buyers enter the market.
Energy and Financials were the best performers of the day, the latter finding some support after being heavily sold-off this month.
GrainCorp was up after announcing its earnings (EBITDA) for 2022 will jump +90% from last year reflecting strong global demand for Australian grain, oilseeds and vegetable oils.
The New Zealand market (NZX 50 Index +1.1%) was up joining a global relief rally for stocks, despite Westpac Consumer confidence report showing households were under pressure due to rising interest rates and inflation.
Most of the market ended in the green, with risk assets leading gains Restaurant Brands (+6.5%), Metro Performance Glass +4.7%), and Fletcher Building (+3.6%) all up strongly.
3 Things Markets will be Watching this Week
- Geopolitical risks remain elevated given the Russia/Ukraine conflict.
- Inflation (CPI) data out of the UK and Canada, and PMI manufacturing data from numerous regions.
- Locally, the RBA release minutes from their latest meeting, and Fletcher Building will be holding their investor day.
