US markets (S&P 500 Index -2.1%) fell sharply overnight, suffering the worse single day decline since June as markets prepared for a more hawkish monetary policy outlook from the Fed on Friday – as more is still required to fight inflation.
All sectors were in the red, with consumer discretionary and tech leading losses. The NASDAQ index lost -2.7%, with the less volatile tech mega-caps Apple (-2.3%), Microsoft (-2.9%) and Alphabet (-2.5%) falling with the majority of the market.
Cinema operator and meme stock AMC Entertainment slumped -42%, trading back down to May lows (and down -80% from its 12-month high) – giving back all of its recent gains following news its UK equivalent Cinewrold is considering bankruptcy as the sector struggles to recover from pandemic.
European markets (Stoxx 600 Index -1.0%) were down as recession fears escalate. The European Central Bank (ECB) guided that they must continue to lift interest rates, even if this causes a recession. Russia announced it will halt gas supplies into Europe for three days to allow for maintenance, putting added pressure on the gas-reliant region.
OoH! Media (OML:ASX)
Out-of-home advertiser Ooh! Media shares jumped +8.5% after releasing a better-than-expected result for the first half of the 2022 financial year.
The result was buoyed by the ease in covid restrictions and opening of international borders increasing advertising spend back in the sector. Accordingly revenue was up +10% from last year to $276.1m, and operating earnings (EBITDA) soared +62% from last year to $51.5m.
Fly, Locate and Road were the best performing sectors. Ooh! Media also expanded their out-of-home business adding 378 new locations, which included 21 retail centres and 11 road digital advertising platforms. The strong turnaround and optimism meant the company intends to buy back ~10% of its issued capital for approximately $75m, improving shareholder gains.
We remain Buy High Risk rated on Ooh Media, as a beneficiary of reopening at current levels.
Australia & New Zealand Market Movers
The Australian market (ASX 200 Index -1.0%) fell yesterday, following global sell-off over the weekend as investors fret over more aggressive policy tightening from the Fed, and a mixed day of local earnings
All sectors were lower, with interest rate sensitive Consumer Discretionary, Technology, and Real Estate sectors leading the sell-off.
Ampol shares rose +2.3%, as a major turnaround in refining margins improved its earnings, doubling its interim dividend and opening the door for some share buybacks.
Star entertainment fell -2.4% after reporting a full-year loss of $198.6m, and says it’s too early to tell what the impact of Crown’s new Sydney property (which only recently opened its gambling area, after facing some licencing issues) has on Star entertainment’s Sydney casino.
The New Zealand market (NZX 50 Index, +0.7%) was up on Monday, on a busy day of earnings results, bucking the global sell-off.
Freightways was up +1.6%, after announcing it had acquired Australian courier business Allied Express for A$160m, along with its full year earnings which was inline with expectations.
Steel and Tube was a stand out up +6.2% after almost doubling its profit on favourable pricing and strong demand.
Fisher and Paykel Healthcare rose +3.1% partially recovering from its earnings downgrade on Friday.
Things Markets will be Watching this Week
Monday
Australia: Earnings from Ampol, Cooper Energy, OoH! Media, and Star Entertainment.
New Zealand: Earnings from Freightways, Steel & Tube, and Property for Industry.
Tuesday
Global: US new home sales
Australia: Earnings from Ansell, Boral, Endeavour Group, Kogan, Scentre Group
New Zealand: Earnings from Heartland group, and Summerset.
Wednesday
Global: US Pending homes sales data, and Eurozone consumer confidence.
Australia: Earnings from Coles, Domino’s Pizza, G8 Education, Qantas, Tabcorp, and WiseTech Global.
New Zealand: Annual shareholder meeting by Fisher and Paykel Healthcare and earnings from Meridian Energy, Ebos and Spark.
Thursday
Global: US second quarter GDP and initial jobs claim data.
Australia: Earnings from Appen, Ardent Leisure, Blackmores, Costa Group, Flight Centre, and Pilbara Minerals
New Zealand: Retail sales data, and earnings from Air NZ, Sky City, and Sky TV.
Friday
Global: Japan CPI (inflation) data.
Australia: Earnings from Next DC, Ramsay Healthcare, and Wesfarmers
New Zealand: ANZ consumer confidence report, Earnings from Port of Tauranga, Tourism Holdings, and Delegat Group.
