Global markets were mixed on overnight, as US Markets (S&P 500 Index +2.1%), snapping up a 3-day losing streak as the price of oil slid sharply lower.
Brent crude fell -8% to $98 a barrel, with the fall attributed to comments from Russia’s Foreign Minister that sanctions on his country won’t affect the Iranian nuclear deal, which could revive the deal and bring Iranian oil back onto global markets. The price of crude oil has seen a dramatic spike and subsequent drop after hitting $130 a barrel. The rise in covid-19 cases in China and lockdown restrictions are seen as also tempering demand for oil.
Investors were in a risk-on mood with all sectors trading strongly except for Energy, with Technology, Consumer Discretionary, and Telecommunications leading gains. Chip makers which were heavily sold off in the previous session bounced back, as well as Airline companies after carriers raising their revenue outlook and benefitting from easing in fuel prices.
European Markets closed lower (Stoxx 600 index -0.3%) as investors digest implication of the ongoing war.
Asian markets were hit hard again from the lockdowns with the Chinese CSI 300 Index down -4.6%, while Hong Kong’s Hang Seng plummeted -5.7%. Despite strong data showing Chinese retail sales up +6.7% year on year and industrial production +7.5% year on year grew more than expected was ignored by investors, who appeared to be capitulating after initial falls caused by a smorgasbord of concerns about covid-19 lockdowns, a stalling property market, regulatory tightening and potential fallout from China’s relationship with pariah Russia.
Pushpay (PPH:NZX / PPH:ASX)
Pushpay share jumped +7.8% yesterday after reconfirming its 2022 full operating earnings (EDITDAFI ending March 2022) would be between US$61.5m and US$63.5m. This compares to its downgraded guidance range of US$60m to US$65m and the above guidance includes costs associated with the investment into the Catholic initiative of $2m.
Management also revealed positive year on year processing volumes up +10% from the previous year, which is still solid but softer than what was hoped.
WE remain BUY rated on Pushpay.
Australia & New Zealand Market Movers
The Australian market was down yesterday (ASX200 index -0.7%) due to concerns over halted economic activity in China as they deal with a new wave of covid lockdown restrictions.
Miners were the major drag on the market, the price of iron ore (being more linked to Chinese economy) slipped -7% dragging major miners lower BHP (-4.2%), Rio Tinto (-3.9%) and Fortescue Metals (-4.9%). While the losses spread across other miners experiencing heavily losses, Chalice Mining down -10.3%, Champion Iron slipping -9.4% and Lynas Rare Earths was down -8.3%.
Energy stocks were also weaker as the price of oil tumbled.
Tech stocks were also sold off in anticipation of the Fed’s upcoming rate hike, while financials were stronger.
The New Zealand market was flat on Monday (NZX 50 index) in anticipation of interest rate hike in the US.
Many interest sensitive stocks traded weaker, which were offset by travel stocks performer stronger ahead of Wednesday announcement regarding change in rules for international travellers.
Tourism Holdings rose +5.8% and Auckland International climbed +1.3%, unfortunately Air NZ failed to take-off slipping -2%.
3 Things Markets will be Watching this Week
- Geopolitical risks remain extremely elevated with the Russia/Ukraine conflict.
- Highlights this week include the US Fed interest rate meeting, Bank of England and Bank of Japan rate calls, inflation data from the Eurozone, and Chinese retail sales, industrial production, and fixed assets investment.
- Locally, NZ fourth quarter GDP results, and Australia’s employment data