News

The New Zealand market (NZX 50 Index, -0.1%) slipped marginally on Tuesday. Today at 10:45 am we receive the December quarter inflation rate, which is forecast to show a slowing pace in the rise of consumer prices. Rate sensitive retirement stocks ruled the market on Tuesday, led by Ryman Healthcare (+5.7%), Summerset Group (+2.0%), and Arvida Group (+1.8%). AFT Pharmaceuticals (+2.4%) advanced after announcing that it had secured a licensing and distribution deal for nine eastern Europe countries.  

US markets (S&P 500 Index +1.2%) rose as markets anticipate a less aggressive rate hikes by the Fed.  Semiconductor stocks were a winner on the day, Advanced Micro Devices (+9.2%), Qualcomm (+6.6%), and Nvidia (+7.6%), as well as Tesla (+7.7%) and Apple (+2.4%) register healthy gains on the day on China reopening would boost business operations.

Markets continued on an upswing last week with the US S&P 500 up nearly 4% year to date and the Nasdaq Tech index gaining 7% in January so far, driven by i) consensus that inflation has ‘peaked’ and ii) markets assuming a rate hike of 25 bps by the Fed next week.

The New Zealand market (NZX 50 Index, -0.3%) took the shock resignation of Prime Minister Jacinda Ardern in its stride on Thursday. The fact that this is an election year with a high probability of a change in government contributed to its muted impact on the market. 

US markets (S&P 500 Index –1.5%) gave up early gains to close lower on Wednesday, posting its worst day in a month. Investors looking to take profits following the strong start to the year while weak retail sales data also weighed negatively on investors sentiment.  

The New Zealand market (NZX 50 Index, 0.6%) continued advancing Tuesday on optimism of China’s reopening.  The heavyweights of the index were some of the best performers on the day, including Mainfreight (+3.5%) and Fisher & Paykel Healthcare (+2.4%). 

The New Zealand market (NZX 50 Index, +0.5%) followed global trends of a positive start to the year to reach a four-month high. One of the highlights was Auckland Interntional Airport which shot up +2% to $8.31 a share touching post-covid highs.

Good morning and welcome to our inaugural “Market Thoughts”, our newsletter covering Blackbull Research’s house views on broad-based market themes on the week that’s been and the week ahead. Let’s crack into it.

This will be the final daily email of the year returning back mid-January and would like to take this time to wish everyone a Merry Christmas and happy new year.  It has been a volatile year, headlined by out-of-control inflation, aggressive rate hikes by central banks tightening loose monetary policy from the onset of the pandemic to cool demand, while the Ukraine invasion creating added fuel crisis. We believe next year would be another year dominated by more volatility as we see the full effects of the rate hikes play out to cool economic activity with stability in the market still some time away and think a soft landing (which some may still hope for) is now out of the picture. For that reason, we are on a more cautious and defensive position and would wait to see how the next 3-9 months play out before making any major positions.