Global markets were mixed overnight (S&P 500 index -0.4%) with US equities pulling back from record highs as technology and consumer discretionary stocks sold off, offset by a gain in financials after strong initial results from several big US banks.
Goldman Sachs and Wells Fargo rose +2.3% and +5.5% respectively after delivering strong first quarter results. JPMorgan Chase fell -1.9% despite reporting the largest earnings jump, after releasing more than $5 billion in reserves which had been put aside to cover potential covid-10 driven loan defaults. JP Morgan shares dropped after warning that loan demand was challenging, with higher interest rates weighing on mortgage finance applications.
Closer to home, the RBNZ left the OCR unchanged at 0.25%, with the bank noting they will not be changing their Large Scale Asset Programme which will remain at $100 billion. The bank is taking a “least regret” approach and will keep monetary conditions loose (i.e. interest rates low and the supply of money high) until it is confident its inflation and employment targets could be “sustainably” met.
Business Desk has introduced a vaccine which allows the public to track how NZ's vaccine rollout is going. NZ is currently averaging ~5,500 vaccines per day, a rate that needs to increase to ~30,000 if all adults are to be vaccinated by 31 Dec 2020 (and ~22,000 for 70%). To-date ~105k first doses have been administered, and 30,200 second doses, 2.6% of New Zealanders have received at least one vaccine.
Ooh Media Limited (OML:ASX)
Out of Home advertising company oOH Media shares have held steady for a while, and were higher after delivering their 2020 full year result.
As expected, they delivered weak numbers being heavily impacted by covid-19 lockdowns, however trading conditions in the fourth quarter were encouraging enough to give investors hope. We anticipate trading conditions to continue to improve with the roll out of the vaccines and the Trans tasman bubble which will support CBD foot traffic and Airports with their commute segment linked to air travel.
We are currently HOLD rated on OML.
Australia & New Zealand Market Movers
The Australian share market was higher yesterday (ASX 200 index +0.7%) hitting a new "post covid-19" high, with tech stocks leading the charge and all other sectors in the green.
Mining and healthcare stocks were also stronger as investors expect vaccine rollouts and record levels of monetary stimulus will continue to drive record-breaking growth rates. Aussie tech shares were aggressively sold down recently from their highs, and with a few months of under performance investors now seem to be taking advantage of the 'relatively' cheaper prices and buying the dip.
The New Zealand market rose on Wednesday (NZX 50 index +0.8%) with strong gains from the gentailers following the RBNZ's decision to keep rates on hold.
Meridian Energy jumped +4.5% and Contact rose +3.3% as investors increase their positions heading into clean energy ETF rebalance on Friday. Retirement village operator Arvida jumped +3.5% to $1.76 after being given a ‘buy’ recommendation from a broker, the highest price since mid-February.
3 Things Markets will be Watching this Week
- Reporting season in the US also kicks into gear with 24 S&P 500 companies due to report including JPMorgan, BofA, Citi, Morgan Stanley and Goldman.
- Locally, the latest employment data in Australia is due while the RBNZ meets on Wednesday.
- Bank of Queensland will release 1st half earnings on Thursday with quarterly updates due from Transurban, Mineral Resources and Auckland Airport. AGM’s are scheduled for Santos, Woodside, NZME and Seeka.
