Global markets edged lower overnight (S&P 500 -0.7%) as gains across the tech sector were offset by broad selling as data showed US private employers laid off 20.3m workers in April, underscoring the economic fallout of the covid-19 pandemic. Trump is also outlining a stage 2 exit from lockdown, saying that deaths will have to be experienced in order to save the economy, which also increases the chances of a second wave of infections.
Despite the strong market rally since March, we think the market generally will remain volatile as actual economic data and corporate earnings results/guidance test market expectations.
Pushpay (PPH:NZX / PPH:ASX)
Pushpay shares have surged to new record highs and are up +38% in 2 days. This is very pleasing as we reiterated our buy rating on PPH as a top pick during the covid-19 recovery on the 3rd of April.
Pushpay released very strong guidance for the 2021 financial year yesterday. The Church software and mobile payment provider has been able to benefit from covid-19 outbreak as restrictions on public gatherings have seen more American churchgoers adopt the digital platform to connect virtually and make donations through the mobile app.
For 2021 Pushpay expect operating earnings (EBITDAF) to be between US$48m and US$52m, doubling its 2020 result of $25.1m, as more churches appreciate the benefits of the software as well as benefit from its recent acquisition of Church Community Builder.
We remain BUY rated on PPH. We will be releasing a full PPH update in our weekly report
Australia & New Zealand Market Movers
The Australian market (ASX 200 Index -0.4%) slipped after two strong sessions, with the market weighed down by the big 4 banks.
JB Hi Fi shares rose +3.4% after announcing its third quarter sales rose +11.6%, faring better than expected.
The New Zealand market was up (NZX 50 +0.8%) on Wednesday, led by Pushpay and as Kathmandu shares continued to rise on the back of strong online sales data and news of opening up retail stores in Australia.
NZ King Salmon was slightly weaker after releasing a reasonable update, reaffirming operating earnings guidance as it provided a fish performance update.
Large property stocks fell as a retail survey found rents at major shopping malls were down ~50%, with most tenants offered some form of rent relief such as rent reductions or deferrals.
3 Things Markets Will be Watching this Week
- Covid-19 and lock-down news-flow remains key in terms of market moves.
- In the US, earnings will continue to dominate headlines, with the likes of Disney and PayPal due to report results. Investors are also bracing themselves for an awful jobs report, which is likely to see the US unemployment rate surge to about 16.0%.
- Locally, the RBA meets this week, NZ employment data is due while earnings are expected from Westpac, Macquarie Group, Orica and Pushpay.
Have a Great Day,