Global markets continued to move higher overnight, making it the fourth straight day of wins for the US market this week. Gains were led by technology stocks, including Microsoft and Amazon, while financials also had a strong session with gains across banking heavyweights Goldman Sachs and JPMorgan.
There were more signs the US economy is expanding with positive economic data releases overnight, which saw equity markets move higher and further bolstered the chances of a December interest rate hike. This has also seen the US dollar continue to strengthen, with the NZD/USD now at a 4-month low (of 71 cents), and the AUD/USD sliding below 78 cents.
In terms of US economic data, important monthly employment figures will be released tonight. In saying that Friday's jobs report will be viewed cautiously in light of recent weather disturbances — particularly Hurricane Irma, which would have impacted the survey.
Stock in Focus: Shopify (SHOP:NYSE)
Shopify shares are down -14% in two trading days on huge volume after the company came under attack from notorious short-selling firm Citron Research. Shopify provides a cloud-based, multi-channel commerce platform designed for small and medium-sized businesses.
Citron has a mixed record of short selling but does raise some interesting points in relation to the company's business practices. Shopify have responded today saying that they "vigorously defend" their business model. We were hoping for a more detailed response from SHOP and have placed our BUY rating under review while we analyse the implication of the report.
Members should look out for a full update on Shopify to be released in our weekly report.
Australia & New Zealand Market Movers
The Australian share market was essentially flat on Thursday (ASX 200 index -0.01%) as the banks continued their recent declines, Qantas hit new highs and the major iron ore companies managed minor gains. The Australian dollar extended its retreat in the wake of a poor retail sales report.
In other stock news, almond company Select Harvests requested for its shares to remain in a trading halt until Monday October 9 as it prepares an announcement in relation to a proposed capital raising. No further details were given and shareholders have been left to speculate why the company needs to raise capital.
The New Zealand market was in positive territory (NZX 50 index +0.31%) hitting a fresh high on Thursday led higher by A2 Milk and Synlait Milk, while Auckland Airport was the worst performer for the day. Technology services company ERoad climbed +18% percent on Thursday after the company continued to gain traction in the US in the latest quarter ahead of the December deadline for logistics firms to adopt and use electronic logging devices.
3 Things Markets Will be Watching this Week
1. The Reserve Bank of Australia makes an interest rate decision on Tuesday.
2. While markets have largely brushed off the geopolitical situation with North Korea, risks certainly remain.
3. Important monthly US employment figures are released at the end of the week.
Have a Great Day,
Team
