Global markets were mixed overnight, as the US market (S&P 500 Index +0.5%) started the new quarter a touch higher. Increasing optimism for a safe and effective covid-19 vaccine eased concerns that another round of business lockdowns could be on the cards.
Pfizer’s shares rose more than 3% after the drug maker said a covid-19 vaccine is being developed with German biotech firm BioNTech which showed promise and was found to be well-tolerated in early-stage human trials.
This positive development was partially offset by California and Arizona reporting their biggest daily virus case increases and as Houston’s intensive-care units exceeded full capacity, resulting in the US reporting its second highest day of covid-19 cases, with no signs of slowing down anytime soon.
Next DC (NXT:ASX)
Data storage company Next DC (NXT) jumped +8% yesterday after announcing a material contract win in New South Wales.
Contracted commitments in NSW have risen by approximately 4MW to more than 36MW, meaning contracted customer commitments plus expansion options at NSW data centres are now approaching 60MW. Due to the new customer commitments, Nextdc has committed to completing the S2 data centre site fit-out to a total planned capacity of 30MW, with the revenue recognition likely to commence during the 2021 financial year.
The recent surge in demand (partly prompted by covid-19 and work from home practices) is continuing to accelerate and now exceeding NXT's expectations.
We remain BUY rated on NXT.
Australia & New Zealand Market Movers
The Australian market rose on Wednesday (ASX 200 +0.6%), gains partially offset by a new spike of covid-19 cases in Victoria, causing the state to impose stricter restrictions and a full lockdown across 10 suburbs where the virus may be concentrated.
House prices in Australia continue to fall as Melbourne and Perth showed the heaviest declines of 1.1% each over the month, Sydney prices fell 0.8%, as investors fled the market increasing the supply of apartments for sale. Despite this, the Aussie banks were up as better manufacturing activity in China data continues to keep investors slightly upbeat on potential recovery in the global economy.
Travel stocks continue to perform well like Webjet (+7.5%), Flight Centre (+3.2%), Qantas (+2.4%) and Sydney Airport (+1.2%), finally getting bids after getting hit hard in the past week, given easing restrictions news across the rest of the Country.
The New Zealand market fell yesterday (NZX 50 Index -0.9%) as market heavyweight Fisher and Paykel healthcare (which now represents 17% of the NZ Index) fell -4%, giving back some gains after a strong rally.
Auckland International Airport declined -2.3%, after updating the marketing with a "somber" update, with daily flight numbers down -80% from pre-covid levels. Despite supportive domestic numbers the trans-tasman bubble appears to more likely be delayed from its initial September.
Z Energy fell -0.7% after reporting total fuel volumes for the week ended June 28 were flat compared to the prior week, and total volumes are down ~27% percent compared to pre-covid levels (or ~17% percent when excluding jet fuel).
3 Things Markets Will be Watching this Week
- Covid-19 newsflow around a second wave and re-opening of economies remains front of mind.
- Key US data including monthly employment numbers are released at the end of the week
- Minutes from the last US Federal Reserve meeting will also be released this week.
Have a Great Day,