Global markets were mixed on Friday as the US market ended a six-day run of making new record highs. A sector hit particularly hard were pharmacy shares which fell on Amazon competition fears.
Investor sentiment was dampened following the first monthly decline in US nonfarm jobs in seven years, as the monthly employment survey showed payrolls fell by -33,000 last month. However, a weak data point was to be expected as hurricanes Harvey and Irma left displaced workers temporarily unemployed and delayed hiring. A bright spot was a better-than-expected rise in average wages.
Closer to home, the final election results were counted over the weekend in NZ and special votes saw the National Party lose 2 seats dropping from 58 to 56 seats. At the same time, the Labour Party gained 1 seat to 46, and the Greens also gained a seat taking their total to 8. The balance of power likely remains with New Zealand First (9 seats) given a coalition requires 61 seats to govern. For the week ahead, NZ investors are likely to keep an eye on coalition talks, with negotiations scheduled to go through to the 12th.
Stocks in Focus: AU/NZ Model Portfolios
Both ’s model portfolios outperformed the market in September, with the NZ portfolio up +1.9% (versus NZX 50 +1.4%) and the AU portfolio up +1.3% (versus ASX 200 -0.6%).
Returns in NZ for the month were led by currency sensitive stocks Xero (+17%), Tourism Holdings (+9%), Fisher & Paykel Healthcare (+8%), and Scales Corporation (+7%). Once again Metro Performance Glass was the major drag on the portfolio (-9%). In Australia gains were led by a rebound in Myer (+10%) and Wellard (+12%). Healthcare exposures CSL and Invocare also had a strong month. Dragging on performance were Ardent Leisure and Treasury Wine Estates which retraced on profit taking.
Australia & New Zealand Market Movers
The Australian share market rallied on Friday (ASX 200 index +1.04%) boosted by the mining, energy and banking sectors as the market notched its first weekly gain in 3-weeks. In stock specific news, Chevron and Woodside Petroleum have opened a new front in WA’s gas-rich North West, revealing yesterday they would spend more than $200 million exploring in 23,000sqkm of the North Carnarvon Basin.
The New Zealand market was more or less flat on Friday (NZX 50 index +0.03%) as Meridian Energy and Port of Tauranga led gainers, while dairy stocks Synlait Milk and A2 Milk Co gave up some of their recent gains. In other news, Spark New Zealand has kicked off its response to the Commerce Commission's probe into the mobile market, urging the regulator to keep it narrow and brief to avoid regulatory uncertainty for investors.
3 Things Markets Will be Watching this Week
1. The NZ political situation and negotiations as a coalition government is formed now that all the special votes have been counted.
2. While markets have largely brushed off the geopolitical situation with North Korea, risks remain.
3. Minutes from the last US Fede4ral Reserve Meeting are released on Thursday.
Have a Great Day,
Team