Markets Bounce Back | PGG Wrightson

7 December 2021

Global markets were higher overnight, US markets (S&P500, up +1.1%) shaking off omicron concerns and erasing last week’s losses, on reports the new covid variant is relatively mild. Adding to the positivity is China easing fiscal policy to support economic growth, cutting reverse ration requirement by 0.5%.

US CDC head Fauci’s weekend comments that the early data on Omicron are “a bit encouraging regarding the severity” of the variant, relieving initial concerns that the new variant could evade the protections of current vaccines.

All sectors were higher with investors risk appetite returning, stocks linked to the reopening of the economy gained. Travel leisure and hospitality stocks seeing the biggest advanced. Tech shares and healthcare stocks lagged the market, Moderna suffering the biggest decline down -13.4% due to the lower severity of the new variant. 

European Markets (Stoxx 600 index, up +1.4%) with almost all sectors and bourses closing in the positive territory with travel and leisure stocks jumping +4.1%. 

PGG Wrightson  (PGG :ASX)

PGG Wrightson, jumped +2.5% yesterday after lifting their operating earnings (EBITDA) guidance for the 2022 financial year to $58m, thanks to an excellent spring trading over the first half. More encouraging its guidance is ahead of the $56m figure reported in the impressive 2021 financial year which was considered difficult to beat earlier.

While another upbeat update we are HOLD rated on PGG Wrightson at current levels.

Australia & New Zealand Market Movers

The Australian market was up marginally overnight (ASX 200 index +0.1%).

Gains in Utilities and Consumer staples were offset by a sharp decline in Australian tech stocking following volatile trading over the weekend with buy now pay later stocks hit the hardest.

Investors moved to more defensive holdings, Coles and Woolworths both advancing +2.7% and +2.6% to help soften the blow. Metcash leading the group up +7.3% as pandemic boom in local regional shopper saw first half profit rise +3%. 

CSL fell -0.5% after losing a court challenge to overturn the US Customs and boarder Protections agency’s decision to ban Mexican citizens from crossing into the US to donate blood plasma.

The New Zealand market was lower on Monday (NZX 50 index, down -0.6%) as omicron uncertainty around the globe weighed down on the market.

Gentailers were lower, as global markets come to terms to Fed making multiple rate hikes next year.

Most stocks were weaker, local tech stocks taking Wall street’s lead falling hard Pushpay down -2.2%, Trade Window slipping -2.8%, and Serko down falling -1.6%.  

3 Things Markets will be Watching this Week

  1. Key events this week US and China CPI (Inflation) data, and trade Data from China.
  2. Developments around the Omicron variant of covid will be dominating headlines. 
  3. Locally, the RBA meets to review its cash rate, earnings release from Metcash, and AGM’s held by Bank of Queensland and Pendal.
Global markets were higher overnight, US markets (S&P500, up +1.1%) shaking off omicron concerns and erasing last week’s losses, on reports the new covid variant is relatively mild.

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