Global markets were higher overnight as Tech stocks bounced from a drop in the previous session, which saw investors move to more value-oriented stocks from growth shares.
Wall Street was boosted by Apple, which once again hit the $US1 trillion market value level after it unveiled its latest range of product updates and also rolled out a streaming TV service at a price that undercuts Walt Disney and Netflix.
Global investors mostly are in a holding pattern before the ECB's policy decision tonight. Easier policy is expected with the European Central Bank, and it will be ECB president Mario Draghi's last meeting before handing over to Christine Lagarde.
Stock in Focus: Invocare (IVC:ASX)
Funeral services company InvoCare (IVC) shares fell after releasing a generally positive set of number for the 2019 first half result, as it showed positive contributions from their Protect & Grow strategy as customers reacted positively towards their improved facilities and services. However, due to a strong price recovery since the start of the year the market had higher expectations for the funeral operator which had been trading at a high valuation recently.
After a tough 2018 for Invocare, 2019 saw a return back to more normalised death rate levels. On top of that, a meaningful contributions from acquisitions made over the last year and completion of a number of rejuvenated sites all drove revenue up +7% from last year to $241.5m, and operating earnings by +16.9% from last year to $468.8m. Invocare also entered into the pet cremation industry within the half, as it has been identified as a rapidly growing industry which is also a natural expansion of its core operations.
We currently have a BUY recommendation on IVC
Members should look out for a full update on IVC to be released in our weekly report.
Australia & New Zealand Market Movers
The Australian market was higher yesterday (ASX 200 Index +0.36%) as the major banks and miners led gains. Miners have gained on signs China has started to stimulate its economy again, cutting reserve requirement ratios for its banks late last week. Some economists are expecting more supportive measures from the People's Bank of China. As in NZ, the defensive and technology names sold off.
The New Zealand market sold off sharply (NZX 50 Index -1.95%) on Wednesday as higher interest rates reduced demand for reliable dividends from index heavyweights such as Meridian, Contact, Mercury and Spark.
Low interest rates have underpinned the NZX's high proportion of yield stocks, such as utilities and property investors, and they were among the hardest hit as investors took profits off the table. Economic data showed Australians and Americans continued to visit New Zealand in growing numbers in the traditionally quiet month of July, more than offsetting the decline in Asian tourist numbers.
3 Things Markets Will be Watching this Week
- Trade War related news-flow is likely to continue to feature in headlines.
- US inflation data is published on Thursday.
- Thursday's policy meeting at the European Central Bank will be watched closely
Have a Great Day,
