New Zealand Market Movers
The New Zealand market (NZX 50 Index, -0.1%) fell marginally on Friday, but finished the week up +2.5%. The weekly advance is largely thanks to Fisher & Paykel Healthcare’s (-1.1%) weekly gain of +16.8%, although the stock fell on Friday on the back of better-than-expected result. Gentrack (+1.2%) continued its advance, bringing its weekly gain to +46.8%.
Email-technology stock Blackpearl (-13.6%) declined after becoming the second company to list on the NZX this year. Tomorrow, WasteCo will perform a reverse-listing with Goodwood Capital to become the third company to list on the exchange in 2022.
Auckland International Airport (-1.2%) dropped on Friday after Auckland Mayor Wayne Brown proposed the council sell its $2.1 billion stake in the company.
Australia Market Movers
The Australian market (ASX 200 Index, -0.7%) fell on Friday thanks to a fall in Energy (-2.5%), but still managed to eke out a +1.1% weekly gain.
Financials (-1.0%) also performed poorly on the day, including declines registered by Commonwealth Bank (-1.4%), ANZ (-1.2%), and Westpac (-0.7%). This week, the Reserve Bank of Australia will deliver its latest interest rate decision, with a 25-basis-points hike the most likely. However, some market participants are proposing that the RBA might opt to leave the cash rate unchanged.
Europe Market Movers
European markets (Stoxx 600 Index, -0.2%) fell after digesting jobs data from the US. Oil and Gas (-1.1%) led sectorial losses, with most other sectors and exchanges in the red.
US Market Movers
US markets (S&P 500 Index -0.1%) ended marginally lower on Friday, with the market mostly looking past the hotter-than-anticipated Non Farm Payrolls, which limits optimism that the Federal Reserve can begin slowing interest rate hikes. The Federal Reserve delivers its interest rate decision for December on the 13th/14th. All the major indices rebounded from much larger losses earlier in the day.
The Non-Farm Payrolls data showed 260K jobs added to the US economy in November, more than the expected 200K jobs.
Stock in Focus: Home Depot (HD.NYSE)
We initiate coverage of Home Depot with a HOLD rating. The company is engaged in selling home building, hardware and DIY supplies to both professionals and retail consumers. The company maintains +2,300 stores (vs. +1,700 for its largest competitor, Lowes) and is mainly domiciled in the U.S. 45% of sales come from professional trades vs. 55% from retail consumers.
Wait and buy at the right price
Home Depot is unquestionably our favourite pick in this sector. We think as we continue into a recessionary environment the patient investor will be rewarded with an opportunity to buy a share of this stellar company.
What Markets will be Watching this Week (UTC +13)
Monday
EA ECB President Christine Lagarde Speech
Tuesday
US Factory Orders MoM OCT
AU RBA Interest Rate Decision
Wednesday
NZ Global Dairy Trade Price Index
AU GDP Growth Rate YoY
Thursday
AU RBA Bradley Jones Speech
Friday
NZ Electronic Retail Card Spending YoY NOV
Saturday
US Producer Price Index MoM NOV