Global markets were mixed overnight, as US markets (S&P 500 Index) pared back early gains to end the session flat. There seems to be an element of profit-taking post the rally that followed softer-than-expected inflation data, with the Federal Reserve still set to keep tightening monetary policy.
The NASDAQ tech index was down -0.7%, giving back some of its +2.9% gain on the Wednesday session, with riskier assets suffering the largest losses. Disney jumped +4.7% after reporting better than expected earnings after the bell, including higher-than-expected subscriber numbers to its Disney+ service. Brent crude oil crept back above $100/barrel, as daily consumption rises, boding well for energy stocks, the select few sectors in the green.
European Markets (Stoxx 600 Index) were flat on a mixed day of trade, and gains for oil and gas stocks were offset by losses for healthcare stocks.
QBE Insurance (QBE:ASX)
QBE Insurance shares rose +3.3% yesterday following its half-year result for the 2022 financial year highlighting progress in delivering stronger, more consistent underwriting earnings, with North America’s long-awaited turnaround on track.
QBE reported the highest premium growth in its international operating segment outside of North America and Australia Pacific, growing 18.5%. Results were buoyed by lower catastrophe costs, which helped reduce the impact of war in Ukraine and positive operating leverage resulting in underwriting profit (Excluding investment income) of $1,191m. However, the insurer reported an $840m loss in investment income for the half due to unrealised losses in risk assets and significant widening of credit spreads.
We remain BUY rated on QBE and are encouraged by the update.
Australia & New Zealand Market Movers
The Australian market (ASX 200 Index, +1.1%) was up following a strong lead from Wall street, with all sectors in the green except for utilities.
Telstra’s shares fell -1.3% as the telco’s revenue and profits both slipped but were in line with expectations. Fortunately, they announced a surprise increase in the final dividend to 8.5 cents per share.
The New Zealand market (NZX 50 Index) was flat again on Thursday.
A strong lead from Wall Street saw riskier assets trade higher, but these gains were offset by losses across more defensive names which dominate the NZX.
3 Things Markets will be Watching this Week
– US and China inflation (CPI) data will be the major news of interest
– US earnings continues now towards the backend.
– Locally, Australian earnings kick off with the financial sector, Suncorp, NAB, CBA, AMP and QBE due to report this week as well as Telstra and ResMed.
