Global markets were mixed overnight as the Nasdaq (US Technology index) hit a new record high.
Quarterly earnings announcements on Wall Street continue to dominate investor focus. This morning, Google’s parent Alphabet announced earnings figures which seem to have disappointed the market. Once again, US earnings season will be watched as closely as ever given the current level of the market.
As we discussed yesterday, both the Australian Dollar and NZ Dollar have surged to close to 2-year and 1-year highs of 79 cents and 74 cents versus the US dollar respectively. While there was some strength in the US dollar overnight, the AUD/USD and NZD/USD exchange rates were little changed.
Stock in Focus: NZ Refining (NZR.NZ)
One stock which is directly exposed to moves in the NZ dollar versus the US dollar is NZ Refining (NZR). NZR’s refining margins are priced in US Dollar terms, so any fall/gain in the NZ dollar versus the US dollar translates directly into profit/loss for NZR.
NZR announced its throughput and margin report for May and June last week which saw a positive share price reaction. The oil processor said it achieved a gross refinery margin of USD 7.63 per barrel in the period, and received $58.4 million in processing fees, up from $43.3 million in the previous year.
We currently have a High-Risk BUY recommendation on NZ Refining.
Members should look out for a full update on NZR to be released in tomorrow’s weekly report.
Australia & New Zealand Market Movers
The Australian share market fell on Monday (ASX 200 index -0.61%) with a sell-off in banks and miners, as last week's brief spell of optimism faded and investors positioned themselves ahead of profits season next week. In stock news, Australia’s biggest gold miner Newcrest Mining has posted a 2.4% drop in full-year gold production driven by lower output at its Cadia mine in NSW, which was shut after an earthquake in April.
The New Zealand market was higher on Monday (NZX 50 index +0.15%) led by Stride Property and Warehouse Group, while dual-listed Westpac Banking Corp and Australia & New Zealand Banking Group fell. In stock news, retailer Warehouse announced it is selling its financial services business to a subsidiary of SBS Bank for $18m, although most of that will be offset by an impairment. The sale is expected to be completed within the next five weeks. Warehouse shares have been under pressure for some time, and the market appears to have liked the decision.
3 Things Markets Will be Watching this Week
1. US Corporate Earnings season will be centre stage with major Tech stocks such as Amazon & Facebook set to report
2. The US Federal Reserve makes an interest rate decision Thursday morning (AU/NZ time)
3. OPEC oil producing nations are set to meet in Vienna this week
Have a Great Day,
Team