New Zealand Market Movers
The New Zealand market (NZX 50 Index, +0.1%) barely eked out a gain on Thursday. The story of the day was Fonterra hiking its earning guidance to $0.50 to $0.70 per share, up from previous guidance of $0.45 to $0.60 per share. In response, Fonterra Shareholders’ Fund Units (+4.7%) rallied.
Air NZ (+2.0%) similarly gained after upgrading its half-year earnings guidance. Its earnings are now expected to come in at $275m to $325m in the six months to December 31, up from its previous guidance of $200m to $275m. In addition to strong demand, Air NZ noted that falling fuel prices were a major factor in its upgrade.
NZ November credit card spending is due today at 10:45am.
Australia Market Movers
The Australian market (ASX 200 Index, -0.8%) fell on Thursday, led by a plunge in Downer (-20.4%), after the miner acknowledged that it had discovered some “accounting irregularities” which means its current earnings guidance was overstated. As such, Mining (-0.9%) was the third worst performer on the day, only beaten by Financials (-1.0%) and Energy (-2.8%)
Europe Market Movers
European markets (Stoxx 600 Index, -0.2%) fell for the fifth consecutive session, bogged down by Retail (-1.2%) and Financial Services (-1.0%).
US Market Movers
US markets (S&P 500 Index –0.6%) snapped a five-day losing streak on Thursday after Continuing Claims for Unemployment Benefits data showed a modest rise of 62K to 1.671 million, suggesting that a slowdown in the hot jobs market that the Federal Reserve wants to see is beginning to appear.
Meanwhile, ExxonMobil (+0.3%) announced that it will lift its share buyback program from $30 billion to $50 billion, as well as spending between $23 billion and $25 billion on new energy projects next year, up from previously announced $22 billion.
Stock in Focus: Activision Blizzard (ATVI.NASDAQ)
Despite a broad-based rally, Activision shares are down after The Federal Trade Commision (FTC) announced that it will block Microsoft’s acquisition of Activision Blizzard. We note the FTC has a mixed record when it comes to succeeding in lawsuit, and word on the street suggests it may be a strategy to extract written concessions out of Microsoft.
The company has already agreed to provide the popular Call of Duty franchise to rival Nintendo for a ten-year period, suggesting the company is open to concessionary action. We remain cautiously optimistic on the deal. As of writing ATVI had declined -1.5%, suggesting the market has taken the news in its stride. Key to the deal going through, we believe, will be significant concessions to rival Sony — we would not be surprised to see an expanded version of the deal Nintendo struck, given Microsoft’s desire to see the deal close.
What Markets will be Watching this Week (UTC +13)
Monday
EA ECB President Christine Lagarde Speech
Tuesday
US Factory Orders MoM OCT
AU RBA Interest Rate Decision
Wednesday
NZ Global Dairy Trade Price Index
AU GDP Growth Rate YoY
Thursday
AU RBA Bradley Jones Speech
Friday
NZ Electronic Retail Card Spending YoY NOV
Saturday
US Producer Price Index MoM NOV