US markets (S&P 500 Index -2.9%) gave back yesterday’s rally to close lower on Thursday at a new 2022 low. All sectors ended in the red, led by Consumer Discretionary (-3.4%).
Apple’s (-4.9%) woes continued for another day after being excluded from yesterday’s rally. Weighing on Apple today was news that the company let go its Procurement Chief, Tony Blevin, after he made an off-colour joke in a TikTok video.
European markets (Stoxx 600 Index, -1.7%) continued their slide on Thursday, with Retail (-4.0%) leading all sectors into negative territory.
The temporary (but unlimited) bond purchases that the Bank of England announced on Wednesday have helped keep the British pound (2.0%) afloat for a second day and now trades at 1.1046. The euro (+0.8%) is also benefiting from the BoE’s action. The US dollar index (-0.4%) is down solely on the strength of the pound and euro.
Meta Platforms (META: NASDAQ)
Meta Platforms fell on news that the company would be enacting a hiring freeze and a major restructuring. In a memo to staff, Meta CEO Mark Zuckerburg justified the action as the “macroeconomy remains tough and volatile”.
Further, Zuckerburg noted that the company will end the year as a smaller organization and that budgets across all teams will be tight. The latter note perhaps alluding to Meta slightly pulling back on its investment in long-term plays like the Metaverse.
We initiated coverage of Meta Platforms with a SELL rating this week. In our latest report we noted our expectation for this reduced headcount. “FANG” stocks tend to move with the broader NASDAQ, and we still think earnings contraction has some way to go, which implies lower equity prices. The “cheap” price of Meta may look tempting to some, but we advise caution: Alphabet looks like a better company to us.
Australian & New Zealand Market Movers
The Australian market (ASX 200 Index, +1.4%) followed the rallies in European and US markets on Thursday. All sectors closed in the green, led by Energy (+2.8%) and Materials (2.2%).
The New Zealand market (NZX 50 Index, +0.7%) experienced a soft rally on Thursday, with export stocks performing the best. Tourism Holdings (+2.9%) and Auckland International Airport (+0.9%) rising on the day. Air NZ (+0.7%) announced that it may offer a five-and-a-half-year unsecured, unsubordinated, fixed-rate bond to NZ retail and institutional investors.
Gentrack Group (+9.0%) surged on Thursday after the company revised up its revenue guidance for the current financial year by $10 million to ~$125 million.
The NZ dollar (-0.5%) followed the Australian dollar (-0.4%) down by about half a percent.
What Markets will be Watching this Week (UTC –4)
Monday
Germany Ifo Business Climate (SEP)
Tuesday
US Durable Goods Orders MoM (AUG)
US New Home Sales (AUG)
Wednesday
Germany Consumer Confidence
NZ Business Confidence (SEP)
Thursday
Germany Inflation YoY (SEP)
China Caixin Manufacturing PMI (SEP)
Friday
Japan Consumer confidence (SEP)
Euro Area Inflation Rate YoY Flash (SEP)
