New Zealand Market Movers
The New Zealand market (NZX 50 Index, -0.8%) was dragged down by market anticipation for a 75-basis-points rate hike from the Reserve Bank of New Zealand in one month’s time. 2 and 10-year Bank swap rates are now at 12 and 14-year highs, respectively. Additionally, commercial banks, starting with ANZ and Westpac, are increasing mortgage rates.
Thanks to a rebound in international and domestic travel, Auckland International Airport (+2.2%) announced yesterday at its annual meeting that it is forecasting a 2023 profit guidance between $100 million and $130 million, up from a previous guidance of between $50 million and $100 million.
Vulcan Steel (+0.4%), also holding its annual meeting yesterday, rose after reaffirming earnings before interest, tax, depreciation and amortisation guidance of between $215 million and $235 million for the 2023 financial year (compared with $243 million recorded in 2022).
Eroad (-5.0%) and Fisher & Paykel Healthcare (-4.4%) registered outsized losses on the day.
Australia Market Movers
The Australian market (ASX 200 Index, -1.0%) fell with IT (-3.8%) stocks leading losses, with only Energy (+3.1%) is moving higher (Financials (+0.04%) were practically flat on the day).
Santos (+2.0%) revealed that elevated gas prices propelled it to record sales of US$2.15 billion for the September quarter and free cash flow topping US$1 billion for the first time.
On the economic front, Australia’s unemployment rate held steady at 3.5% in September. Yields on 10-year Australian government bonds jumped 16-basis-points to 4.1060%
Europe Market Movers
European markets (Stoxx 600 Index, +0.3%) rose on Thursday after reversing early losses as much as -0.7%.
The UK components of the Stoxx 600 was buoyed by the resignation of Liz Truss as UK Prime Minister. The British pound (+0.1%) first rocketed up to $1.133 from $1.1185 against the US dollar on the resignation announcement, but the market has since withdrawn this optimism knowing that a divisive leadership race, which may include Boris Johnson, now lay ahead.
US Market Movers
US markets (S&P 500 Index -0.8%) slipped as bond yields hit new highs, with the 10-year Treasury yield (+0.1%) reaching 4.2283% on Thursday, a level not seen since 2008
However, several strong earnings reports helped stem greater market losses on the day, with AT&T (+7.8%) and IBM (+4.7%) both beating estimates for their most recent quarter. Tesla (+6.7%) on the other hand, moved in the opposite direction, after announcing that it expects to miss its deliveries target for the year.
In after-hours trade Snapchat slumped –26% after its third quarter revenue miss epxectations, bringing other advertising stocks lower.
Woodside Energy (WDS.ASX)
Woodside Energy (+6.2%) experienced its best day since March after upgrading its full-year production guidance and reported record production for its September quarter of 2022. The update underpinned by strong LNG pricing, the company upgrading its production for the remainder of the year.
We remain HOLD rated on Woodside, at current levels we see that stock as fully priced and would pay out attractive dividends. However, with deep recession risk looming be believe commodity prices could eventually come under pressure presenting downside risk to Woodside over the near-term and for that reason we aren’t buyers are current levels.