Global markets were quiet overnight, with the US market (S&P 500 index +0.02%) remaining flat while rates dipped ahead of key US CPI (inflations) data due this week.
Energy, consumer cyclical and real estate sectors were up the most, pared by falls in utilities and consumer staples. Tesla erased early gains dipping 0.3% despite increasing deliveries for the month of May for its China business, which was up +29% from April. Amazon rose +2.2% after launching 6-month prescriptions from US$6 through its online pharmacy operations.
Airline stocks turned higher as travel restrictions between the US eased for 61 countries including Japan, France, South Africa, Canada, Spain and Italy.
European Markets were a touch higher (Stoxx 600 up +0.1%) as travel and real estate sectors both reporting gains which were offset by data showing industrial output in German was slightly weaker in April.
Contact Energy (CEN:NZX)
Contact Energy shares were up +2.1% yesterday, after delivering another strong set of monthly data. CEN is benefitting from higher wholesale electricity prices, which look set to increase earnings over the near and medium-term. May 2020 was its best month since July 2015 (when CEN still owned its metering, LPG and gas storage businesses) in terms of earnings.
We continue to remain BUY rated on Contact as our preferred gentailer sector pick, with the recent rally meaning it still pays a modest dividend with room for growth over the medium-term from its Tauhara geothermal power station due in mid-2023.
Australia & New Zealand Market Movers
The Australian market (ASX 200 index +0.1%) was a touch higher yesterday.
It was a robust session for Aussie Tech companies which have recently started to make a comeback from their heavy sell-off, which was offset by weakness amongst the miners.
Mesoblast was the best performer of the day up +8.8%, followed by EML payments which added +6% and Wisetech up +5.8% buoyed by strong growth expectations for their profitability. Nuix the data analysis did not fare as well as its tech counterparts trading lower following an investigation into the level of Macquarie had over the business prior to its share market listing.
The New Zealand market (NZX 50 index +0.2%) was mixed, with healthy gains amongst high yielding companies as the market races ahead following strong US employment data released late last week.
Spark rose +1.9%, Chorus was up +1.5% and Meridan was up +0.5% – the latter encourage by energy sectors analysis showing the Tiwai Point Aluminium smelter is operating better than anticipated and could continue operating past 2024.
SkyCity fell -5.7% as the market reacted to Australian regulator probe into the "potential serious non-compliance" with anti-money laundering and counter-terrorism laws in in its Adelaide casino.
3 Things Markets will be Watching this Week
- Central bank rhetoric globally remains in focus for investors.
- Easily the key data release this week is the May CPI print in the US, which will be released early Friday morning NZ time.
- Aside from consumer confidence data in Australia and NZ, other releases of note this week include the ECB meeting and Scales Corp hosting its AGM.