Global markets were higher on Friday, with the US market (S&P 500 index +0.4%) marking its seventh positive day in a row, after the October jobs report came in better than expected – boosting optimism around the economic recovery.
Data showed job gains for the month of October totalled 531,000, well ahead of consensus estimates called for 450,000 jobs added – causing all sectors to rise, except healthcare. This was seen as solid data, without causing concerns that it would influence Fed policy. Over the weekend, Congress passed Biden’s $1.2 trillion infrastructure bill. The infrastructure spending will be spread over a number of years, and Biden is now focused on a $1.75tn ‘Build Back Better’ social spending bill which faces significant hurdles to satisfy both progressive and centrist wings of the party.
Pfizer shares surged up +11% after the company said its Covid-19 drug, used with an HIV drug, cut the risk of hospitalization by 89%. Pfizer board member Dr. Scott Gottlieb said Friday that the pandemic could be over in the US by the time President Biden’s workplace vaccine mandates take effect in early January.
The news boosted classic re-opening plays, United Airlines (+7%), American Airlines (+5.7%), Carnival and Royal Caribbean rallied more than 8% each, while Norwegian Cruise Line (7.8%). Expedia saw its shares roar higher by 15.6% a day after the company said renewed travel demand boosted its top and bottom line profit higher than analysts had expected.
Peloton shares cratered more than 35% after the fitness platform and maker of interactive treadmills and exercise bikes reported a much larger loss than expected and cut its full-year outlook as fitness buffs headed back to the gym and away from at-home workouts.
European Markets (Stoxx 600 index +0.05%) were only marginally higher as investors digested US jobs data and covid news-flow.
Sydney Airport (SYD:ASX)
It is believed Sydney Airport will confirm that it has received a binding offer form IFM investors and Global Infrastructure Partners’ consortium and will recommend investors accept the bid, which is understood to be worth $8.75 a security. The board would likely to recommend and come to a shareholder vote, with Sydney's largest shareholder UniSuper to vote in favour. The next milestone will be for the deal to meet regulatory approval from the commerce commission (ACCC) in terms of industry competition.
We are now HOLD rated on Sydney Airport – due to the share price reflecting the current takeover bid.
Australia & New Zealand Market Movers
The Australian market was up on Friday (ASX 200 index +0.4%).
The Reserve Bank of Australia upgraded its economic growth forecast for Australia expected a strong bounce back in 2022.
Westpac (-2.8%) became the first major bank to increase home loan rates (in Australia), with CBA following (+1.1%) with other banks also up slightly. Westpac’s share price fall was associated to the stock going ex-dividend on its 60 cent per share final dividend.
Link group led the market higher up +8.6%after receiving a takeover bid from US private equity giant Carlyle for $5.38 per share. Afterpay was down -5.5% after larger earnings miss by US payments giant Square weighed down on the stock.
Woodside petroleum slipped -1.8% after cutting tis gas reserves forecasts.
Blackstone has reportedly walked away from its Crown takeover with the fund not planning to return with any new offer for at least 18 months. It remains to be seen if Blackstone divests its 9.99% holding purchased during 2022.
The New Zealand market was up on Friday (NZX 50 index +1.0%) as central banks overseas (US Fed and Bank of England) aimed to keep rates lower for a tad longer.
The news saw some yield stock rise and Kiwi dollar fall – helping lift exports Fisher and Paykel Health care (+1.9%) and A2 Milk (+2.0%).
Port of Tauranga led the market higher jumping +3.7% followed by Mainfreight Limited which rose +3.4% – the latter expected to deliver a strong result this Thursday.
Briscoe Group dropped -1.9% after it reported a -14% drop in third-quarter sales due to the latest covid lockdown, adding It still expects to achieve its profit guidance of more than $73 million. While retailers Hallensteins group fell -1% and Kathmandu remained flat.
3 Things Markets will be Watching this Week
- Key events this week include CPI (inflation) data from the US and China.
- Employment data from Australia.
- Local earnings from James Hardie, NAB, Pushpay, Xero, Orica, Infratil, Goodman Property, Pusdpay and Mainfreight and AGM’s are scheduled for Contact Energy, Fortescue, Ansell, Coles Group, Lendlease, Charter Hall, Computershare and REA Group while Investor Days will be hosted by Stockland and Kathmandu.
