Global markets traded in a tight range overnight as the US market hovered near highs. Once again, investors are awaiting corporate profit results to assess whether stock market valuations are justified.
During earnings season, investor attention generally shifts away from economic and other issues and back to company profit figures. So far early reactions have been muted with the major banks that have reported failing to inspire the market. In terms of an upside surprises, Netflix has beaten market expectations for subscriber growth and is up strongly after hours this morning (+11%). It is still very early days and we will be watching earnings developments closely.
Stock in Focus: Delegat's Group (DGL.NZ)
Delegat Group, New Zealand's largest listed winemaker, has lifted its operating profit guidance after a record year for case sales which saw its shares jump +3% yesterday.
The Auckland-based winemaker, whose brands include Oyster Bay, is now projecting $38.5m in net operating profit for the year ended 30 June 2017, from $37m in 2016. This was another pleasing announcement from DGL, and reflected in a positive market reaction.
We are currently BUY rated DGL given its solid operations and as a benefactor of a weakening NZD.
Members should look out for an update on DGL to be released in tomorrow’s weekly report.
Australia & New Zealand Market Movers
The Australian share market lost ground on Monday (ASX 200 index -0.17%) as declines from the heavyweight banks and health care companies offset strong gains from the miners and energy players to send the Australian share market lower. In stock news, retail shareholders in troubled infant and toddler formula company Bellamy's Australia who paid for extra shares in a recent $45.5 million capital raising will be able to pull out of the capital raise and get their money refunded.
The New Zealand market was broadly higher on Monday (NZX 50 index +0.65%) led by continued gains from retirement villages Summerset Holdings and Metlifecare. The retirement stocks are recovering after coming under pressure with signs of a property market slowdown in Auckland, as well as a large supply of shares coming to the market from the listing of Oceania Healthcare and Infratil selling its stake in Metlifecare.
3 Things Markets Will be Watching this Week
1. The US Corporate Earnings season will be centre stage
2. Minutes from the last Reserve Bank of Australia are released Tuesday
3. NZ inflation data is also published on Tuesday
Have a Great Day,
Team