New Zealand Market Movers
The New Zealand market (NZX 50 Index, +0.8%) experienced a broad-based advance on Tuesday.
Pacific Edge (+7.6%) rallied after announcing that new clinical evidence showed significant improvements in the performance of its Cxbladder product and had been accepted for publication in the American Urological Association (AUA) Journal of Urology.
Dairy shares performed well for a second day, with A2 Milk (+2.0%), Synlait Milk (+0.6%), and Fonterra Shareholders’ Fund units (+0.3%) advancing.
Australia Market Movers
The Australian market (ASX 200 Index, +0.3%) closer higher on Tuesday, lifted by IT (+1.7%) and Industrials (+1.5%).
Financials (+1.4%) also performed well with Bendigo and Adelaide Bank (+6.9%) reported cash earnings of $245 in the five months to November 30, 15% above market expectations. Additionally, ANZ (+2.4%), NAB (+2.0%), and Westpac (+1.3%) all advanced.
CSL (-0.4%) fell after announcing that its CEO of more than a decade, Paul Perreault, will step down in March 2023, but will remain a strategic advisor. CSL’s chief operating officer Paul McKenzie will step into the CEO position.
Europe Market Movers
European markets (Stoxx 600 Index, +1.3%) rallied on Tuesday, led higher by the Technolgy (3.1%) sector, in reaction to the latest US inflation data. In the currency market, the Sterling (+0.7%) hit a six-month high of 1.242 against the US dollar, with the Euro (0.8%) advancing similarly. The AUD (+1.5%) and NZD (+1.3%) both appreciated by more than a percent.
US Market Movers
US markets (S&P 500 Index +0.7%) moved higher in reaction to the weaker-than-expected inflation data. Consumer prices rose by +7.1% year-on-year (vs expectations of +7.3%), which is the smallest advance since December 2021. Core CPI (excluding fuel and used cars) rose +6.0% vs expectations of +6.1%. The latest data raises hope the US Federal Reserve could soften its stance on interest rate hikes. Although the market might not be completely sold on this notion considering it eventually retracted from its intraday high of +2.5%.
2-year Treasury yields sank -19bp to 4.22% and the US 10-year losing -12bp to 3.49%.
Tesla (-4.1%), moving against the market, touched its lowest price in 2 years.
Stock in Focus: G8 Education (GEM:ASX)
G8 Education (+2.5%) advanced after reporting its year-to-date operating earnings before interest and tax of $71 million and operating net profit of $41 million. The company noted that its earnings had ‘significantly improved’ from the second quarter onwards as a result of well-managed recovery and cost control.
Further, the company noted that it looks forward to improved macro conditions as improved affordability and accessibility targets are improved across the sector after the passing of the federal government’s ‘Cheaper Child Care Bill’.
We maintain our High risk BUY recommendation – given the potential for a strong recovery to recommence over the near-term after overcoming the current challenging period with the omicron peak passing.
What Markets will be Watching this Week (UTC +13)
Monday
GB GDP MoM OCT
Tuesday
AU Westpac Consumer Confidence Index DEC
Wednesday
US Inflation Rate YoY NOV
Thursday
US Fed Interest Rate Decision
AU Unemployment Rate NOV
Friday
GB BoE Interest Rate Decision
EA ECB Interest Rate Decision
US Retail Sales MoM NOV
Saturday
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