New Zealand Market Movers
The New Zealand market (NZX 50 Index, +0.2%) rose slightly on Thursday.
Supplement maker Me Today (+27.3%) led percentage gains, jumping to 1.4 cents per share, in very light trading. Small-cap tech stocks were mixed, including Rakon (-1.0%), Serko (+6.6%), Scott Technology (-0.7%), Eroad (-1.1%), and ikeGPS (+5.4%).
Mercury NZ (+0.4%) advanced after delivering its quarterly operational update, which noted that the past December had been one of the wettest on record, leading to a +38% increase in hydro generation for the December quarter compared to the previous corresponding period.
We choose to be more cautious and make some changes to our NZ portfolio, trimming down positions and increasing our cash. Lower Spark –1% down to 11%, Lower EBOS –1% down to 8%, Contact Energy down –1% to 5%, and Flecther Building down –1% to 3%. This will increase our cash from 10% to 14%, and with the upcoming Pushpay takeover then eventually increase cash in our NZ portfolio to 20% – with the aim to deploy funds later in the year once volatility subsides.
Australia Market Movers
The Australian market (ASX 200 Index, 0.0%) was closed on Thursday in observance of Australia day.
Just like our NZ portfolio, we will trim positions in our Australian portfolio. Lowering Telstra down –1% to 5%, ANZ down –1% to 5%, Westpac down –1% to 6%, Macquarie down –1% to 4%, James Hardie down –1% to 2% and Costa group down –2% to 2%. This will increase our cash +7% to 21%.
Europe Market Movers
European markets (Stoxx 600 Index, +0.4%) closed in the green on Thursday, with Retail stocks (+2.2%) leading sectorial gains.
US Market Movers
US markets (S&P 500 Index +1.1%) have been buoyed by corporate earnings from Tesla (+11%) and fourth-quarter GDP coming in above expectations, at +2.9%, above expectations (+2.8%), and down from the third quarter rise of +3.2%.
US GDP data released overnight showed the US economy grew but at a slowing rate over fourth quarter of 2022, but managed to beat expectations nonetheless. Consumer spending slowed and residential investment plunged, but government spending and stronger business investment provided an offset. Still, the future is more important than the past and there is plenty of speculation about a hard landing in the US this year as the tightening cycle reaches maturity.
Tesla shares surged +11% after posting record revenue and earnings for the fourth quarter of 2022, beating market expectations. The stock is now up +42% for the year, and have recovered most of its losses suffered in December.
Stock in Focus: MOËT HENNESSY LOUIS VUITTON (LVMH)
LVMH (1.17%) reported record results, defying a year where consumer spending has been challenged – revenue increased 23 per cent to €79.2bn whilst net profit grew 17 per cent to €14bn. In addition, the Arnault-controlled behemoth increased its dividend by 20% to 12 euro per share. The luxury house’s results are in stark contrast to smaller peers like Richemont and Burberry, who reported decreased sales that were impacted by China’s COVID-related shutdowns. LVMH is a component of our US Model Portfolio and we continue to rate the stock a buy, in our view it is the strongest luxury company in the world that is comfortably diversified by its exposure to luxury spirits and champagne.
What Markets will be Watching this Week (UTC +13)
Monday
NZ Westpac Consumer Confidence DEC
Tuesday
NZ Balance of Trade NOV
NZ ANZ Business Confidence DEC
AU RBA Minutes of Dec Policy Meeting
Earnings From Microsoft, Johnson & Johnson
Auckland International Airport Monthly Traffic Update
Wednesday
EU Consumer Confidence DEC
CPI (Inflation) data for Australia and New Zealand
Earnings from Tesla
Quarterly updates from Fortescue, Woodside Energy and Mineral Resources
Thursday
GB GDP Growth Rate YoY Final Q3
Bank of Canada Interest rate decision
Earnings from Visa, LMVH, Mastercard
Friday
US Chicago Fed National Activity Index NOV
US fourth Quarter GDP
Earnings from ResMed
Saturday
US Durable Goods Orders MoM NOV