Global markets rebounded overnight with the US market surging higher after what has been a sharp sell-off over the last few days.
Wall Street rallied on news that the US is seeking a negotiated trade resolution with China, with both Chinese and now American officials signalling a preference to solve the US trade deficit with China through talks. The United States asked China in a letter last week to cut the tariff on US autos, buy more US-made semiconductors and give US firms greater access to the Chinese financial sector, the Wall Street Journal reported on Monday, citing unnamed sources.
Whatever the final outcomes, it is clear volatility has returned to markets – which is an area we discussed at our Investor Day for 2018 over the weekend. It was great to see a large turnout (100 people) and a number of guest speakers from companies such as Pushpay and Metlifecare, as well as fund manager Pathfinder Asset management.
Metlifecare presenting over the weekend
The presentation slides have been uploaded online – under the top trades & education section of our website (we will have the full videos up shortly) for those interested.
Stock in Focus: Select Harvests (SHV:AX)
Shares in almond producer Select Harvests (SHV) have been showing relative strength so far this year.
In terms of recent announcements, SHV announced that reported revenue fell by -11% to $112.9m for the first half of the 2018 financial year, which saw operating earnings also fall -20% to $20.1m.
It was an uninspiring set of numbers, as almonds are a commodity and as vulnerable to the supply and demand effect as any other commodity, combined with a bad crop experienced. Although looking forward SHV has estimated that the 2018 crop will be approximately 15,000 tonnes and that the first impression is that the quality and volume could exceed expectations. Looking forward both SHV and ourselves believe demand for almonds will grow long-term from the continual shift towards more health-conscious consumers.
We currently have a BUY (High-Risk) rating on SHV.
Members should look out for our full update on SHV to be released in this tomorrows weekly report.
Australia & New Zealand Market Movers
The Australian share market continued to come under pressure as the global sell-off continued yesterday (ASX 200 index -0.52%). The ASX fell back to a level not seen since October last year as investors continued to fret about the fallout from a potential trade war between the US and China. For the ASX, the 5800 appears to be a strong technical support level with several commentators noting that the market has bounced from around this level quite a few times.
The New Zealand market continued to slide on Monday (NZX 50 index -0.97%) for the second straight session as most major stocks such as Spark, Air New Zealand, Sky Network Television and A2 Milk all fell. In stock news, Sky TV said chief executive John Fellet plans to retire within the next year, after 17 years at the helm. Last month, Auckland-based Sky said it had lost 37,359 customers in the six months ended Dec. 31, including the 10,608 it shed with the closure of its Fatso DVD rental unit, leaving it with 778,776 subscribers at the end of 2017.
3 Things Markets Will be Watching this Week
1. Global politics remain in focus as risks of a potential Trade War between the US and China grow.
2. A number of US Federal Reserve members due to make speeches this week, and investors will be looking for clues around the outlook for further interest rate hikes.
3. US GDP data and personal inflation data is released on Wednesday
Have a Great Day,
Team