Global markets were mixed overnight as the Trump Administrations pro-growth agenda took another hit as the Republicans failed to pass a bill to revamp Obamacare in the US Senate. This has once again raised concerns about the Republicans ability to pass planned reforms into law, and weighed on investor sentiment.
Corporate earnings also continue to be released, with major banks Goldman Sachs and Bank of America reporting disappointing profits. However, the Nasdaq (The Major US Technology Index) hit an all-time high with Netflix leading gains as its shares jumped +13% following a solid earnings update.
Stock in Focus: Wellard (WLD.AX)
Wellard shares have hit an all-time low after Australia's biggest cattle exporter said it expects to post an annual loss of $55m-65m as high prices for local cattle weigh on demand from South East Asia. Wellard said cattle prices in Australia remain "uneconomically high" as farmers hold stock and grow their herds, with CEO Mauro Balzarini disappointed that market conditions have not yet improved as he had expected.
WLD also said it suffered an extraordinary loss (of $8m -$10m) on one voyage in South America, where delays meant some stock was sold to another buyer at lower than predicted prices. Clearly this is another huge disappointment for WLD, which appeared to be turning a corner following its recent capital raise.
We are currently reviewing our recommendation on WLD and Members should look out for a full report on WLD to be released in today’s weekly report.
Australia & New Zealand Market Movers
The Australian share market sold off yesterday (ASX 200 index -1.18%) as the Big Banks led falls in the market ahead of the release of new capital requirements. In other news, unexpected commentary from the Reserve Bank of Australia indicating a potentially more open mind to rate hikes and a falling greenback combined to push the Aussie dollar to a 2-year high.
The New Zealand market ended in positive territory on Tuesday (NZX 50 index +0.10%) as weaker inflation numbers (which imply that the Reserve Bank of NZ will keep interest rates low) bolstered shares, with dividend stocks like Mercury New Zealand and Trustpower benefiting. In stock news, Z Energy was up 1% as it reported operating figures to June 30, which showed it sold 1,000m litres of fuel in the first quarter, up from 975m litres the prior year, with growth from jet fuel sales.
3 Things Markets Will be Watching this Week
1. The US Corporate Earnings season will be centre stage
2. Minutes from the last Reserve Bank of Australia are released Tuesday
3. NZ inflation data is also published on Tuesday
Have a Great Day,
Team