Global markets were slightly higher overnight with US stocks rising as strong earnings and easing of trade tensions lifted materials and industrial sectors. However, trading volumes were light as uncertainty about the outcome of US midterm elections kept investors on the side-lines.
As we touched on yesterday, today’s US congressional midterm elections are of particular interest but tough to call. The polls indicate that the Democratic Party may win back control of the House of Representatives with the Republicans likely to keep the Senate. While at the margins it may become more difficult for Trump/the Republicans to pass policy, we do not see a major market impact from such a result.
Closer to home, the Reserve Bank of Australia kept interest rates on hold at 1.5% yesterday, and interest rates have been at ultra-low levels since August 2016. While there were no surprises on rates, the RBA's growth expectations have surprisingly moved higher seeing GDP growth of 3.5% this year and next.
Stock in Focus: Visa (V:NYSE)
Despite an extremely volatile October for global markets, Visa shares appear to have come out relatively unscathed, with the market pleased with the payment processors fourth quarter result.
Visa 1 Year Share Price Chart
Global markets were slightly higher overnight with US stocks rising as strong earnings and easing of trade tensions lifted materials and industrial sectors. However, trading volumes were light as uncertainty about the outcome of US midterm elections kept investors on the side-lines.
As we touched on yesterday, today’s US congressional midterm elections are of particular interest but tough to call. The polls indicate that the Democratic Party may win back control of the House of Representatives with the Republicans likely to keep the Senate. While at the margins it may become more difficult for Trump/the Republicans to pass policy, we do not see a major market impact from such a result.
Closer to home, the Reserve Bank of Australia kept interest rates on hold at 1.5% yesterday, and interest rates have been at ultra-low levels since August 2016. While there were no surprises on rates, the RBA's growth expectations have surprisingly moved higher seeing GDP growth of 3.5% this year and next.
Stock in Focus: Visa (V:NYSE)
Despite an extremely volatile October for global markets, Visa shares appear to have come out relatively unscathed, with the market pleased with the payment processors fourth quarter result.
Visa 1 Year Share Price Chart
Visa reported solid revenue of $5.4 billion for the quarter up +11% year on year driven by strong consumer confidence raising transaction numbers, and total transaction volumes. Earnings also slightly beat market expectations, benefitting from rising revenues and lower tax rates from the tax reform act.
Visa has a great existing business and benefits from a clear thematic tailwind of growth as the move towards a cashless society accelerates. Because of this, Visa is valued at a premium to the overall market.
We are currently BUY rated on Visa.
Australia & New Zealand Market Movers
The Australian share market rallied yesterday (ASX 200 index +0.98%) to a 2-week high with heavyweight sectors lifting the market in thin trading, with traders distracted by the Melbourne Cup. Volumes were light in Australia as the Melbourne Cup gripped the nation but energy companies and miners helped to lift the market as commodity prices firmed. In stock news, Corporate Travel Management Ltd has been granted a trading halt from the ASX to review and respond to a second report from activist fund VGI Partners.
The New Zealand market was higher on Tuesday (NZX 50 index +0.43%) supported by overnight gains on Wall Street and positive trading in Australia. A2 Milk and Synlait Milk rose. Orion Health Group continued to move higher after the technology company raised the likely price range for its planned buyback to $1.20 to $1.25 from $1.16 to $1.26, following the completion of the sale of its Rhapsody unit to UK private equity firm Hg for $205 million.
3 Things Markets Will be Watching this Week
- US mid-term elections take place on Wednesday (AU/NZ time).
- The US Federal Reserve makes a policy statement on Friday (AU/NZ time).
- The Reserve Bank of Australia makes an interest rate decision on Tuesday, while the Reserve Bank of NZ makes a monetary policy announcement on Thursday.
Have a Great Day
Visa reported solid revenue of $5.4 billion for the quarter up +11% year on year driven by strong consumer confidence raising transaction numbers, and total transaction volumes. Earnings also slightly beat market expectations, benefitting from rising revenues and lower tax rates from the tax reform act.
Visa has a great existing business and benefits from a clear thematic tailwind of growth as the move towards a cashless society accelerates. Because of this, Visa is valued at a premium to the overall market.
We are currently BUY rated on Visa.
Australia & New Zealand Market Movers
The Australian share market rallied yesterday (ASX 200 index +0.98%) to a 2-week high with heavyweight sectors lifting the market in thin trading, with traders distracted by the Melbourne Cup. Volumes were light in Australia as the Melbourne Cup gripped the nation but energy companies and miners helped to lift the market as commodity prices firmed. In stock news, Corporate Travel Management Ltd has been granted a trading halt from the ASX to review and respond to a second report from activist fund VGI Partners.
The New Zealand market was higher on Tuesday (NZX 50 index +0.43%) supported by overnight gains on Wall Street and positive trading in Australia. A2 Milk and Synlait Milk rose. Orion Health Group continued to move higher after the technology company raised the likely price range for its planned buyback to $1.20 to $1.25 from $1.16 to $1.26, following the completion of the sale of its Rhapsody unit to UK private equity firm Hg for $205 million.
3 Things Markets Will be Watching this Week
- US mid-term elections take place on Wednesday (AU/NZ time).
- The US Federal Reserve makes a policy statement on Friday (AU/NZ time).
- The Reserve Bank of Australia makes an interest rate decision on Tuesday, while the Reserve Bank of NZ makes a monetary policy announcement on Thursday.
Have a Great Day
