Global markets were up overnight, as US Markets rebounded (S&P 500 Index, +2.6%) reporting the best single day rise since June 2020, and ending a 4-day losing streak.
Markets are reacting to an easing in commodity prices that had spooked investors lately, with WTI crude oil tumbled more than -12%, to settle at $108 per barrel, as Russian and Ukrainian Foreign Ministers are set to meet in Turkey on Thursday.
The US tech index NASDAQ rose +3.6%, with investors willing to buy the recent dip after it entered a bear market (down -20%). Financials and telecommunications also performing strongly after beating heavily beaten down, while Energy stocks that have been recent winner was the laggard.
European Markets were up (Stoxx 600 index +4.7%) strongly led by banks automakers and travel and leisure stocks.
Wesfarmers (WES:ASX)
Wesfarmers tumbled lower when it released its last result after it was forced to cut its interim dividend following a fall in profit driven by supply chain disruptions and risings costs. The conglomerate reported broadly flat revenue but a 14.2% decline in net profit after tax to $1.2 billion, this was driven largely by the loss of ~34,000 store trading days due to COVID related closures.
We are HOLD rated on Wesfarmers and prefer Woolworths as our BUY pick.
Australia & New Zealand Market Movers
The Australian market was up yesterday (ASX200 index +1.0%) ending a three-day losing streak.
All sectors traded higher with technology and communication stocks leading gains as investors start to bargain hunt, particularly across growth names. While rising commodity prices continue to given energy and material stocks more gas in the tank.
Insurance group Australia was flat after warning investors it had received 24,0000 claims due to floods and storms.
Aristocrat Leisure rose +4% saying it was working to ensure the safety of its 1000 employees located in Ukraine.
The New Zealand market was up on Wednesday (NZX 50 index, +0.3%) snapping up a 4-day losing streak, as investors jumped back into the market.
Stocks that had been heavily beaten down recently regained some ground, with Plexure leading the market higher up +7.9%, Pacific Edge climbing up +2.4%, and Pushpay rising +1%.
3 Things Markets will be Watching this Week
- Geopolitical risks remain extremely elevated with the Russia/Ukraine conflict.
- Highlights this week include the latest US inflation (CPI) print.
- The European Central Bank (ECB) meeting and trade data from China will be closely watched.