New Zealand Market Movers
The New Zealand market (NZX 50 Index, +0.2%) rose marginally on Thursday.
Auckland mayor Wayne Brown caused Auckland International Airport (-0.5%) stock to be placed in a trading halt after making unsubstantiated claims that the company plans to issue more shares to raise capital. Trading resumed after Auckland International Airport refuted the claim.
PGG Wrightson (+3.3%) advanced after it was revealed that ASX-listed Elders had taken a 11% stake in the company.
Infratil (-0.9%) edged down after announcing the launch of its renewable energy investment company, Mint Renewables, in partnership with the Australian investment firm Commonwealth Superannuation Corporation (CSC). Infratil has committed $233 million over the next three to five years.
On the economic front, New Zealand’s GDP data for the September quarter (+2.0%) showed that the economy expanded well above Reserve Bank of New Zealand’s expectations of +0.8%.
Australia Market Movers
The Australian market (ASX 200 Index, -0.6%) closed lower on Thursday, led by losses in Lithium stocks, including Core Lithium (-9.4%), Liontown Resources (-7.9%), and Allkem (-4.9%). Materials (-1.4%) was the worst performing sector on the day.
Shares in ASX Ltd (-0.6%) closed lower after the Reserve Bank of Australia and ASIC announced they will seek additional actions from the company following its failure to deliver a CHESS (Clearing House Electronic Subregister System) replacement project for trade settlement.
Woolworths (+0.1%) traded flat after announcing it will acquire a 55% stake in Petspiration Group for $586 million.
Europe Market Movers
European markets (Stoxx 600 Index, -3.0%) posted its worst day in six-months after the European Central Bank raised its benchmark interest rate by 50-basis-points and noted that it has no plan to slow its hiking pace. Earlier in the session, the Bank of England also raised its rates by 50-basis-points. Technology (-4.6%) and Retail (-4.0%) were the hardest hit sectors.
US Market Movers
US markets (S&P 500 Index -2.7%) fell sharply on Thursday on the release of the latest Retail Sales data in the US. Retail sales declined -0.6% month-over-month in November, more than forecasts of a -0.1% decline, sparking fears that the Federal Reserve’s rate hikes are edging the economy into recession.
Declines were broad-based but led by Communication Services (-4.2%) and Technology (-4.0%). Regarding the latter, Netflix (-9.0%) cratered following a report that the company plans to refund some advertisers after missing viewership targets. Apple (-4.2%), Alphabet (-4.2%), Microsoft (-4.2%), and Amazon (-4.2%) also registered larges declines on the day.
Stock in Focus: JP Morgan Chase (JPM.NYSE)
JPMorgan reported earnings of $3.12 per share, beating the street’s estimates of $2.88. Revenue slightly beat estimates, coming in at $33.29B. Third quarter profit fell 17% YoY as headwinds began to materialise in the company’s business – the bank wrote off $727M in bad debts and took ~$959M in paper losses on stocks. We retain our buy rating for JPMorgan; we consider it to be the best positioned bank stock in this current economic environment. We like the bank’s consumer and commercial banking business which makes it less cyclical than investment-only banks.
What Markets will be Watching this Week (UTC +13)
Monday
GB GDP MoM OCT
Tuesday
AU Westpac Consumer Confidence Index DEC
Wednesday
US Inflation Rate YoY NOV
Thursday
US Fed Interest Rate Decision
AU Unemployment Rate NOV
Friday
GB BoE Interest Rate Decision
EA ECB Interest Rate Decision
US Retail Sales MoM NOV
Saturday
