Global markets rallied overnight, as Wall Street fluctuated wildly yet again. Most recently stocks were higher on optimism that the US and China were working towards a resolution of their trade differences.
Chinese officials have outlined a series of potential concessions to the Trump administration as they continue to try to resolve a trade war, according to three people familiar with the discussions, as reported by a Bloomberg article. Markets are awaiting a potential trade agreement as Trump and Chinese counterpart Xi Jinping are due to meet later this month on the side-lines of the Group of 20 summit in Buenos Aires.
The UK market managed to eke out a gain overnight as politics dominated headlines. A string of resignations in just a few hours have rocked Theresa May's hopes of getting her Brexit deal through parliament, and of surviving as prime minister.
Stock in Focus: G8 Education (GEM:AX)
Shares in early childhood education company G8 Education jumped yesterday as said it intended to offload up to eight loss-making childcare centres. This was a pleasing result as we have highlighted in our last report on the company that we felt its shares were oversold.
The company also signalled an improving outlook, with better occupancy rates in the outer suburbs of Brisbane, Sydney and Melbourne. G8 chief executive Gary Carroll said G8 had 32 centres in the "underperforming" category across its network of 500 centres and they were making $3.5 million in combined losses at an earnings before interest and tax level. The 8 centres up for a sale are seen as being too hard to turnaround.
After a rough year, plagued by industry-wide childcare oversupply, blamed on over-zealous developers, it is interesting to see that the outlook for G8 may be getting brighter.
We are currently BUY (High-Risk) rated on G8.
Australia & New Zealand Market Movers
The Australian share market managed to close in positive territory yesterday (ASX 200 index +0.06%) as a rally in the final hour of trade wiped out heavy afternoon losses on the Australian share market as the ASX narrowly avoided a third straight session in the red. The big stock news yesterday was that Wesfarmers shareholders voted to back the $20bn spin-off of Coles. Coles is on course to debut on the ASX next week after Wesfarmers shareholders voted to demerge the supermarket giant into a $20 billion standalone business.
The New Zealand market was a touch lower on Thursday (NZX 50 index -0.02%) as weak international investor sentiment weighed on recent positive local earnings. In stock news, Sanford fell after the fishing company said the 1.5% increase in full-year operating earnings to $64.7 million was below expectations after climatic conditions reduced catches. New Zealand Oil & Gas shares were sharply lower as it announced the onshore Kohatukai-1 well the firm is a partner won’t deliver commercial volumes of gas and will be plugged and abandoned.
3 Things Markets Will be Watching this Week
1. Trade relations between China and the US ahead of the G20 talks later this month.
2. The latest US inflation data will be published on Thursday morning AU/NZ time.
3. Aussie employment data is also released on Thursday.
Have a Great Day