Global markets were mixed on Friday, as US stocks and Treasuries rose while the dollar sank after Janet Yellen’s speech didn’t take the hawkish tone some expected.
The annual gathering of central bankers in Jackson Hole, Wyoming was the key event to watch over the weekend as investors looked for any clues to the future direction of monetary policy. Fed Chair Janet Yellen’s speech proved to be rather academic, with little mention of current policy as Yellen argued strongly for the US to retain the majority of its financial regulations put into place after the financial crisis.
It was a full-on week last week in terms of earnings announcements across Australia and New Zealand. While the week ahead will continue to see profit announcements, we are moving into the tail-end of earnings season.
Stock in Focus: Costa Group (CGC.AX)
There were some dramatic stock moves last week as investors digested profit announcements across Australia and NZ, with Costa Group being one of last week’s big winners.
Costa Group, Australia’s leading grower, packer, and marketer of fresh fruit and vegetables reported a +10.7% increase in revenue from last year, which translated into net profit of $60.7m which was up +37.3% on the 2016 financial year. The main driver of the impressive result was the strong performance of its Produce segment, with a highlight being its Berry category which saw a 55% increase in blueberry production.
This was another strong result from Costa, and we remain positive on the company as it has been one of our best performing Australian recommendations. Costa presents an attractive way for investors to gain exposure to the ”dining boom” as it benefits from the growing demand for food, as well as being attractive to health conscience consumers.
We are currently BUY rated on Costa, and see the latest result as further confirmation of our positive view.
Members should look out for our full update on Costa to be released in our weekly report.
Australia & New Zealand Market Movers
The Australian share market was little changed on Friday (ASX 200 index -0.03%) with some strong earnings related gains from Super Retail and Medibank capping off some dramatic moves in individual stocks over the week. In other news, Mesoblast Ltd has been granted a trading halt by the ASX pending details of a fully underwritten capital raising.
The New Zealand market was lower on Friday (NZX 50 index -0.13%) with Metro Performance Glass dropping to a record low while A2 Milk Co and Comvita rose on continued optimism following their earnings. In other stock news, Port of Tauranga shares were higher on Friday as it posted a 7.9 percent gain in annual profit to $83.4 million, at the top of its guidance, in a year when total trade rose 10 percent to a record 22.2 million tonnes.
3 Things Markets Will be Watching this Week
1. Corporate profits will be in focus as earnings season continues across Australia and NZ.
2. US politics as investors are concerned around the Trump Administration’s ability to pursue its pro-growth agenda.
3. Closely watched monthly US employment and manufacturing data is released at the end of the week.
Have a Great Day,
Team