Global markets were mixed overnight, as US markets (S&P 500 Index, -0.1%) ended in the red erasing earlier gains as markets retraced following a strong couple of weeks.
A weak result from Nvidia (-6%) with lower-than-expected revenue for the second quarter didn’t bode well, bringing other chip stocks lower.
The Wall Street Journal is reporting that retail punters are back, as meme-stock enthusiasm returns with strong gains from Bed Bath & Beyond, AMC and Gamestop all enjoying healthy gains, with the former rising +40% and experiencing its biggest volume day on record.
European markets (Stoxx 600 Index, +0.8%) rose as retailers led gains on the back of strong earnings results.
Upstart (UPST:NASDAQ)
Upstart shares are down in after-hours trade, negating a +9% rise pre-earnings. Revenue and earnings came in slightly below market expectations. Revenue for the quarter came in at $228m, up +18% from the same corresponding period last year, but down from the previous three quarters, as personal lending numbers fell from the previous quarter. A challenging economic environment may be a speed bump to Upstart’s growth over the near-term but we believe the company should continue a stable growth trajectory as a disruptor to the lending market once we return back to more normal economic conditions over the medium-term (assuming a shallow to mild recession over the near-term).
We remain buy (High Risk) rated on Upstart, due to its healthy margins and ability to generate profits and large cash reserves to withstand upcoming economic uncertainty.
Australia & New Zealand Market Movers
The Australian market (ASX 200 Index, +0.1%) was a touch higher on Monday.
Oz Minerals soared +35.3%, a touch higher than BHP’s $25 per share bid price which was rejected by its board. Gains were shared across other copper miners with material stocks leading gains for the session.
Consumer discretionary and real estate stocks were lower offsetting gains. Suncorp shares fell -4.7% after delivering softer than expected results.
The New Zealand market (NZX 50 Index, -0.2%) edged lower yesterday on another quiet day of trade as investors await earnings results.
Air New Zealand was a touch higher as its latest operating stats showed a further sequential improvement in passenger numbers, helped by the relaxation of border controls & capacity rebuild.
3 Things Markets will be Watching this Week
- Inflation prints in the US and China.
- Commidty prices with oil falling back below $100 a barrel.
- Locally, the focus will be on corporate earnings. Key names due to report this week include Aurizon, Suncorp, NAB Q3, REA Group, Computershare, CBA, AMP, QBE, Telstra, IAG and ResMed.