Global markets were mixed again on Friday as European markets were lower while Wall Street touched record highs, with the S&P 500 index touching 2,500 mark as technology stocks bounced back after two days of declines.
Closer to home, the NZ market was lower as the general election on Saturday appears too close to call which is creating short term uncertainty for investors (markets do not generally like uncertainty). Several large caps were lower on Friday signalling foreign investors may also be a bit nervous. Continued political tensions around North Korea following another missile launch are also weighing on the mood of investors, as the ASX also sold off on Friday.
Stock in Focus: Myer (MYR.AX)
Shares in Myer bounced then gave back gains as the retailer announced its full year profit results late last week.
Myer reported a weak result as full-year sales fell -1.4% to $3,201m and profit before significant items was down -2.2%, although the market did not have high expectations. In terms of outlook, Myer said sales in the first six weeks of the 2018 financial year are below expectations, which could foreshadow what is to come during the upcoming important Christmas and New Year period.
Myer shares have been under pressure given continued weakness in retail trading conditions, and concerns over the expansion of Amazon and TK Maxx into Australia.
We currently have a HIGH-RISK BUY rating on Myer which is under review.
Members should look out for our full update on Myer to be released in our weekly report.
Australia & New Zealand Market Movers
The Australian share market was down on Friday (ASX 200 index -0.76%) as it closed lower for a third consecutive session as North Korea's latest missile launch over Japan spooked investors. With the heavyweight mining and banking sectors both weaker the market remained in negative territory over the day.
The New Zealand market sold off on Friday (NZX 50 index -0.72%) led lower by A2 Milk and Heartland Bank, with Comvita and Scales Corp rising.
The latest general election poll, showed that a Labour-Greens coalition would have enough seats to govern alone, while an earlier poll released on Tuesday had the incumbent National Party leading by ten percentage points. There is clearly uncertainty heading into the election on Saturday, which is being reflected in investor sentiment. In other news, New Zealand Oil & Gas independent directors have recommended shareholders reject a 72 cent partial takeover offer from ASX-listed Zeta Resources because it undervalues the company.
3 Things Markets Will be Watching this Week
1. The polls in NZ as we head towards the general election on Saturday.
2. The US Federal Reserve is due to make a policy announcement Thursday morning AU/NZ time.
3. Minutes from the latest Reserve Bank of Australia meeting are released on Tuesday.
Have a Great Day,
Team
