US markets (S&P 500 Index +0.3%) rose in the final hours of trade overnight., recovering from a loss and snapping up a four-day losing streak.
Energy and tech shares were the only sectors in the red, with the NASDAQ Index down -0.3% logging its first 5-day losing streak since February.
Chip maker Nvidia fell -7.7% after the US government announced it would need special government licenses to sell two of its advanced semiconductors to Chinese customers.
European markets (Stoxx 600 Index, -1.8%) fell extending losses, with all sectors in the red, Travel and Leisure stocks leading the decline.
Markets will be watching another major US employment (nonfarm payrolls) report tonight, expected to be another strong print, that would give the Fed the ability to deliver another 75-basis point rate hike later this month.
Next DC (NXT:ASX)
Shares in data centre operator Next DC (NXT) fell heavily after delivering their 2022 full year result, the selling not helped by a broader tech sell-off for the week.
The fall came despite delivering a solid result on the top end of its previous guidance. Revenue rose +18% from last year to $291m and underlying operating earnings (EBITDA) increased +26% to $169m. The company experienced strong growth and ramped up its investment in expanding its installed capacity.
Looking ahead, Next DC expects the growth to continue strongly into 2023, with revenue expected to rise +17% to 22% from last year, while operating earnings with grow by +12% to +17%, softer than what the market had anticipated.
We are Buy rated on Next DC and believe this sell-off creates and attractive entry point for medium to long-term investors.
Australia & New Zealand Market Movers
The Australian market (ASX 200 Index, -2.0%) fell yesterday as deep recession woes weigh down on the market.
Materials and Energy were hardest hit as commodity prices fell. The ASX’s largest company BHP fell -7.6%, after trading ex-dividend, which intensified its loss.
The New Zealand market (NZX 50 Index, -0.1%) also edged lower.
Risker stocks were generally sold off, while these were offset by small gains from large defensive names.
Fisher and Paykel Health rose +1.5%, after announcing it acquired a $275m 105 hectare site in South Auckland to establish another research and development site.
What Markets will be Watching this Week
Monday
Australia: Earnings from Next DC, Fortescue and Minerals Resources
New Zealand: Earnings from A2 Milk and Restaurant Brands
Tuesday
Australia: Earnings from Woodside Energy, Harvey Norman
Wednesday
Global: Eurozone CPI (inflation data), and China Manufacturing data (PMI)
Australia: Earnings from DGL Group and Atlas
New Zealand: Earnings from Harmony
Thursday
Global: US initial jobs claim data.
Friday
Global: US non-farm Payroll data
