Global markets were mixed overnight as Federal Reserve chairman Jerome Powell – in a second day of testimony signalled again the potential for a cut in interest rates, but a tweet from President Donald Trump admonishing China for not buying enough US agricultural products hit sentiment.
As we touched on earlier this week, corporate earnings will keep investors busy with the first major US companies reporting profit results tonight.
In this week's stock market movers podcast, the episode dominated by AWF Madison, but also talk about Michael Hill and Paysauce. To listen CLICK HERE
Stock in Focus: Michael Hill (MHJ:NZX / MHJ:ASX)
Michael Hill shares have struggled in a retail environment that is no doubt tough and will likely remain tough for some time. Adding to woes, its shares fell sharply yesterday after the company flagged another a hit to its profits.
The jewellery retailer is expecting $10 million to $25 million to be wiped from its profits in 2020 due to a remediation program after discovering it had been underpaying staff following a review. Michael Hill International said an initial review of its Australian retail employment contracts and rostering practices showed non-compliance with some industry requirements over the past six financial years.
We do not currently have full research coverage on Michael Hill and are working on initiating coverage shortly.
Australia & New Zealand Market Movers
The Australian share market was higher yesterday (ASX 200 index +0.39%). In stock news, Whitehaven Coal shares rose firmly on Thursday after reporting it had received better than expected prices for its thermal coal in the three months to June. Gold miners advanced after the price of the precious metal hit a one-week high following US Fed Chairman Powell's dovish testimony.
The New Zealand market added to gains on Thursday (NZX 50 index +0.35%) joining a rally across Asia, as renewed prospects for deeper rate cuts in the US made equity investments more appealing. Dairy stocks also firmed, buoyed by broker upgrades and expectations tight global supplies will support dairy prices near-term.
In stock news, the Commerce Commission cleared Infratil's $3.4 billion purchase of Vodafone New Zealand in partnersthip with Brookfield Asset Management. Outside the benchmark index, fleet management technology company Eroad was higher as June-quarter unit sales rose 6 percent, driven by strong growth in the US. Sales in New Zealand were as expected but sales to small- to medium-sized customers in Australia were soft.
3 Things Markets Will be Watching this Week
- US Corporate earnings season kicks off this week.
- US Fed chairman Jerome Powell will testify before Congress on Wednesday and Thursday.
- In Australia, a business confidence survey on Tuesday will give its first report for a full month since the Coalition’s surprise Federal election victory.
Have a Great Day,
