New Zealand Market Movers
The New Zealand market (NZX 50 Index, -0.9%) fell on Wednesday after the Reserve Bank of New Zealand decided on a 75-basis-points rate hike (touting the possibility of a 100-point hike) taking the Official Cash Rate (OCR) to 4.25%. Further, the Reserve Bank now expects the OCR to peak at 5.5%, much higher than the 4.1% peak they had signaled 3 months ago.
RBNZ noted its believes that New Zealand will enter recession in the second half of next year and house prices will have to fall further, tipping a peak to trough decline of 20%. The effects of the rate hikes to date are yet to make an affect due to their lag on retail rates.
Real Estate stocks (-1.4%) were the second worst performer on the day, only beaten by Energy (-2.1%). Materials (+0.5%) and Financials (+0.1%) were the only sectorial gainers.
Oceania Healthcare (-3.7%) reported its earnings for the six months to 30 September 2022, revealing an Underlying Earnings before interest, tax, depreciation and amortisation (EBITDA) of $38.7m, a 6% increase on the previous corresponding period in 2021. However, lower property value gains resulted in the company’s reported net profit falling -70%.
The rout in Ryman Healthcare (-8.1%) continued Wednesday, with the stock now down –20% since releasing its earnings last week.
Australia Market Movers
The Australian market (ASX 200 Index, +0.7%) advanced to a six-month high on Wednesday.
Qantas (+5.3%) was among the day’s best performers after it (again) lifted its half-year pre-tax profit forecast by 11% to $1.45 billion, in
Europe Market Movers
European markets (Stoxx 600 Index, +0.7%) moved higher on Wednesday, led by gains in Travel and Leisure stocks (+1.9%), Retail (1.8%), and Mining (+1.8%).
US Market Movers
US markets (S&P 500 Index +0.6%) ended a choppy session up and staging an interesting recovering from October lows, as investors digested the latest Federal Reserve meeting minutes.
During market hours, the US Federal Reserve released the minutes from its last meeting where it decided on its interest rate hike. The key takeaway was that officials agreed that smaller interest rate increases should occur soon so that the impact of the hikes on the economy can be evaluated. All sectors traded higher. All sectors traded higher, except for energy as the EU discussed imposing a price cap on Russian oil of between $65 and $70 a barrel.
Stock In Focus: Walt Disney Company (DIS.NYSE)
Now that more information has come to light regarding Bob Iger’s return as Disney CEO, ousting Bob Chapek, we reiterate our BUY rating of Disney. Iger is an extraordinary manager; he oversaw Disney’s visionary acquisition of Pixar and Marvel; under his first tenure Disney saw its stock increase more than five-fold from 2005-2020. We note that Iger will likely have a much harder time on his “second rodeo”, as cord-cutting weighs upon Disney’s traditional linear revenue and Disney+ continues to be unprofitable.
One early bullish sign of Iger’s return is his dismissal of Chapek lieutenant Kareem Daniel, who bore a lot of responsibility for Disney’s lackluster content of the last couple of years. Iger is “cleaning house”, and he is making no bones about it.
What Markets will be Watching this Week (UTC +13)
Monday
EA ECB President Lagarde Speech
Tuesday
Argosy Property earnings
AU RBA Govenor Philip Lowe Speech
Wednesday
Oceania Healthcare earnings
Tower earnings
NZ RBNZ Interest Rate Decision
Thursday
Rakon earnings
Pacific Edge earnings
US Durable Goods Orders MoM OCT
US FOMC Meeting Minutes
Friday
US Thanksgiving Holiday (US markets closed)
Saturday
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