Global markets were lower overnight as investors await the latest developments in US-China trade relations a day before the United States is due to raise tariffs on Chinese goods.
Wall Street's main indexes fell on Thursday as Trump said he was taking steps to authorize new tariffs on $325 billion in Chinese imports, though they pared losses significantly after Trump said reaching a deal this week was possible.
In this weeks podcast, Jeremy interviews NZX CFO Graham Law. Listen to the full episode "We know we need more listings" by CLICKING HERE.
Stock in Focus: Qantas (QAN:ASX)
Qantas shares climbed yesterday after the airline forecast record annual revenue, following a 2.3 per cent rise in third-quarter revenue despite the negative impact of the Easter holiday period shifting into the fourth quarter.
In light of this solid revenue growth, the company is on track to fully offset the impact of significantly higher fuel costs. The company also increased its overall market share of corporate travel revenue by 2.5 percentage points, hitting its highest level in three years. Qantas also announced the sale of its terminal at Melbourne Airport to the airport operator.
At a high level Qantas fits well with our tourism boom investment theme, however factors such as uncertainty around fuel prices and increasing competition mean an investment into Qantas is not without risk.
We currently have a BUY (High-Risk) recommendation on Qantas.
Members should look out for a full update on Qantas to be released in our weekly report.
Australia & New Zealand Market Movers
The Australian share market rebounded late yesterday (ASX 200 index +0.42%) as investors positioned themselves ahead of crucial talks between the US and China.
In stock news, Orica's first-half profits rose substantially during the first quarter, beating analyst expectations. The explosive maker's underlying net profit jumped 35 per cent in the six months to March 31, with chief executive Alberto Caldero citing improving operation performance across the board. Adelaide Brighton declined 10 per cent as it warned profits for 2019 could be up to 15 per cent lower than the previous year. The cement company said weaker demand in residential construction and competition for imports had hurt its operations. GrainCorp declined 4 per cent after reporting a first-half loss of $59 million, blaming drought and international trade tensions.
The New Zealand market added to gains yesterday (NZX 50 index +0.41%) as the NZ market outperformed the rest of the Asia-Pacific region. Cinema technology company Vista Group, which derives most of its revenue overseas, led the market higher, up 5%. Pushpay was the most traded stock on a volume of 5.7 million shares, more than 10 times its daily average.
Outside the benchmark index, PGG Wrightson fell -3% after announcing plans to return $235 million, or 31 cents per share, to investors in a buyback after selling its seeds division. Chief executive Ian Glasson announced his departure at the end of the month, and the company warned annual earnings from the remaining businesses will be at the lower end of guidance.
3 Things Markets Will be Watching this Week
- The US first-quarter reporting season gets into its final stages this week, with some Aussie & Kiwi stocks also reporting.
- The Reserve Bank of Australia makes an interest rate decision on Tuesday afternoon.
- The Reserve Bank of NZ make an interest rate announcement on Wednesday.
Have a Great Day,
