Global stocks were mixed overnight, as US markets rallied with the S&P 500 index closing higher up +0.3%. The Nasdaq technology index jumped +1.0% to close at fresh all-time highs, helped by the US 10-year bond slipping 5 basis points down to 1.48%.
Facebook shares jumped +4.2% after a Federal court dismissed an antitrust case against the company, and the company closed with a market cap above $1 trillion for the first time. The price of oil slipped causing Energy stocks to be a major drag on the market, followed by financials which were also weaker.
European stocks were weaker overnight, with the Stoxx 600 index down -0.6%, led by falls in travel and leisure stocks as Portugal imposed quarantine measures of UK travellers that have not been vaccinated. Re-opening & tourism plays in particular were weaker as the UK reported most new Covid cases since January with HK, Portugal & Spain all imposing new restrictions on British travellers.
Myer Holding Limited (MYR:ASX)
Myer (MYR) shares were weaker yesterday as stricter lockdown measures were imposed over the weekend, and the retailer struggles to bounce back as strongly from covid as its retail peers. Myer did managed to deliver a profit for the first half of their 2021 financial year of $42.9m which included crucial Christmas trade, despite sales falling -13.1% due to covid-19 causing store closures and restricted foot traffic.
Myer’s cost cutting initiatives did help the retailer achieve profit growth but some of these cost savings are one-off with the Job Keeper wage subsidy $32m accounting for most of the profit, and rent outgoings waivers of $18m which are unlikely to be repeated.
We remain HOLD rated on Myer as were prefer to avoid the stock, discouraged by the fact that the profit was largely government assisted.
Australia & New Zealand Market Movers
The Australian market was flat yesterday (ASX 200 index -0.01%) as investors reacted to the covid-19 outbreak which has caused lockdowns or heavy restrictions across most of the country.
Travel stocks were hit hard Webjet falling-4.7%, Qantas down 4%, Flight Centre tumbling-3.5% and Sydney Airport down -1%.
These gains were offset by stay at home stocks with online retailers benefiting the most – Kogan jumping +6.6%, and Harvey Norman up +2.1%, supermarkets which are allowed to remain open as usual were also up Woolworths (+2.9%), Coles (+0.6%) and Metacash (+0.6%).
Healthcare stocks were also higher, while surprisingly tech stocks were the worst performing sector – with some profit taking given their out performance the past week or so.
The New Zealand market was weaker on Monday (NZX 50 index -0.2%) as the pause on the trans Tasman bubble weighed on the market.
Travel stocks faced the brunt of the selling, Air NZ falling -2.5% after being forced to cancel 89 trans-Tasman flights, Auckland International Airport was down -2.2%, Tourism Holding being the hardest hit down -3.8% reversing last week's gains.
Stocks that benefited through the pandemic were stronger, Fisher and Paykel up +1.7%, and Mainfreight gaining +1.4%.
Precinct Properties jumped +3.3%, after revealing ACC had purchased $31m worth of Precinct Property shares since February, and now have a significant ownership of just over 5.1%.
3 Things Markets will be Watching this Week
- Key events this week include US monthly nonfarm payrolls data, the latest US ISM Manufacturing print, an inflation CPI print for the Eurozone.
- In Australia, covid-19 related developments are back in focus with recent lock downs and heavy restrictions.
- In NZ, Sky TV will be holding an Investor Day, and AGM's are scheduled for Argosy and Arvida.