Global markets were higher overnight as the Nasdaq Tech Index hit a record high on the back of Alphabet’s blowout results, bolstering expectations of a robust US earnings season, while a rise in oil and metal prices boosted energy and material companies.
Alphabet (Googles parent company) shares touched a record high after the online search company’s quarterly results surpassed Wall Street estimates. Demand for tech stocks remains high with Amazon and Facebook both scheduled to report results later this week. As we have discussed, given uncertainties around trade and the levels of markets, the current round of corporate earnings announcements is as important as ever.
Stock in Focus: Treasury Wine Estates (TWE:AX)
Shares in Treasury Wine Estates jumped +5.5% yesterday, helped by some positive industry data. We have been supporters of the company for some time now as a beneficiary of an evolving Chinese palette and it has been one of our top performing ASX stocks.
The Australian wine industry is riding a wave of demand from China as its middle class grows and incomes rise. A report from industry body Wine Australia released yesterday showed total wine exports jumped 20% to $2.76 billion in the 2018 fiscal year – which is the highest rate of growth experienced in 15 years. Sales to China were up a massive +55% over the same period, as sales by value hit $1.12 billion for the year, well ahead of sales to the No.2 export market being the United States, at $424 million.
We currently have a BUY rating on Treasury Wine Estates.
Australia & New Zealand Market Movers
The Australian share market rallied on Tuesday (ASX 200 index +0.61%) buoyed by mining, financial and health care stocks after solid earnings out of the US. The major mining stocks recovered from a slump in the previous session as the price of iron ore lifted. In stock news, Kogan.com's quarterly results disappointed investors despite the company reporting revenue growth of 40% and earnings growth of more than 90%, with the company's share price hitting a six-month low.
The New Zealand market was in positive territory yesterday (NZX 50 index +0.32%) as markets rallied across Asia. Gains were led by Fletcher Building and Restaurant Brands, while Vista Group hit a record high. There has been solid buying of Vista shares over recent times, with a positive broker report released yesterday adding to positive sentiment.
3 Things Markets Will be Watching this Week
1. US corporate earnings season continues as investors digest quarterly company profit announcements.
2. Trade anxiety is likely to remain with Trump now threatening to impose tariffs on all $US500 billion of imported goods from China.
3. Key economic news flow includes – Australian inflation numbers out on Wednesday and US GDP data published at the end of the week.
Have a Great Day,
Team