Global markets were mixed again overnight, with US Tech Stocks slightly lower, while the broader US market managed to make gains.
Wall Street was helped by a last-minute deal to salvage NAFTA as a trilateral pact. US President Donald Trump on Monday said a new free trade agreement with Canada and Mexico would support hundreds of thousands of US jobs, marking it as a victory in his push to reshape the lines of global commerce. Investors breathed a sigh of relief that the key pillars of NAFTA had survived his hardball strategy to reshape global commerce. The news shows that the US is able to negotiate a deal, and there may be implications for the ongoing dispute with China
Stock in Focus: Invocare (IVC:AX)
Shares in funeral services company Invocare (VC) have been under pressure of late, selling off for most of 2018.
In terms of recent newsflow, IVC’s 2018 interim result which was negatively received with weaker case volumes due to lower death rates and the closure of a number of sites due to refurbishment. The closure of sites is part of IVC’s Protect & Grow plan which we think can be seen as short-term pain for long-term gain.
The death rate is subject to short term fluctuations; however over the long-term we expect no significant changes to the trend death rate. Our long-term thesis remains intact as we believe IVC is set to benefit from favourable demographics of an ageing population.
We currently have a BUY recommendation on Invocare for medium-term investors.
Australia & New Zealand Market Movers
The Australian share market started the week off in the red (ASX 200 index -0.57%) as the banks lost gains they had made following the release of the royal commission interim reports on Friday. Turnover was light given the public holiday in NSW.
In stock news, Nufarm shares fell after it resumed trading following a successful institutional entitlement offer which raised $238 million. Nufarm's largest shareholder Sumitomo Chemicals did not take part in the offer, the second time it hasn't participated in a Nufarm capital raising in the past year. A2 Milk and Bellamy's Australia were both among the market's best performers on Monday after dairy producer Fonterra announced its milk supply had increased by five per cent in August on the back of positive weather conditions.
The New Zealand market was lower on Monday (NZX 50 index -0.25%) as stocks that rallied into the end of the quarter – including Spark New Zealand and Ryman Healthcare gave up some of those gains. Turnover was light, with the start of the local school holidays and Labour Day in New South Wales keeping trading volumes low. In stock news, Comvita dropped as the honey producer told the NZ Herald new Chinese e-commerce rules won't affect its sales into the world's most populous nation.
3 Things Markets Will be Watching this Week
1. Trade related news-flow is likely to continue to feature in headlines.
2. The Reserve Bank of Australia makes an interest rate decision on Tuesday.
3. Important monthly US employment data (payrolls) is published on Friday.
Have a Great Day
