Global markets were mixed on Friday, as US markets (S&P 500 index -0.08%) were basically flat as investors digested a strong US employment data report and prepare for earnings season.
US non-farm payrolls data showed the US economy added +372,000 jobs for the month of June, with the data much stronger than expected as the unemployment rate was steady at 3.6%. The news alleviated recession fears but allows the Federal Reserve to keep raising interest rates. Treasury yields rose and another 75 basis point Fed hike for this month is still on the cards.
European Markets (Stoxx 600 index +0.5%) closed higher as investors reacted positively to strong US jobs data.
It is going to be a busy week ahead. On the data front we will get the latest US Inflation (CPI) and retail sales data for the month of June, and China’s second-quarter GDP data. Closer to home, the Reserve Bank of New Zealand (RBNZ) is making its monetary policy decision, most likely being another 50 basis point hike, and Australia publishes employment data for the month of June.
Later in the week all eyes will be on US corporate quarterly earnings announcements, which kick off with the major banks on Thursday – JPMorgan, Morgan Stanley, Citigroup, Wells Fargo. Corporate earnings will likely come under pressure as margins face the test of inflation and weakening consumer sentiment.
Summerset Group (SUM:NZX)
Retirement village operator Summerset shares are currently up +1.5% after delivering sound sales data for the first half of 2022 coming in at 511 in total, its second-best first-half sales performance. This comprised 289 new sales and 222 resales.
Summerset continues to experience strong demand despite a turbulent start of the year and appears on track to deliver 600 homes in the 2022 financial year. We are Buy rated on Summerset on a medium term view.
Australia & New Zealand Market Movers
The Australian market (ASX200 index +0.5%) rose on Friday, bringing its weekly gain to +2.1%, its best since mid-March.
Rising commodity prices helped lift Energy and Material stocks which did the heavy lifting for the market, as most sectors traded higher.
Technology stocks also performed well with a strong lead from Wall street, while financials lagged, Magellan declined -3% after reporting a further $5.2 billion has been pulled from its assets under management.
The New Zealand market (NZX 50 Index +0.5%) was up on Friday, closing the week up +3.3%.
Eroad had been the stand out up +49% staging a recovery rally, as well as Tourism Holdings which lifted +8.5% over the week. Sky City (-6.2%) was not as fortunate as investors continue to sell the stock as it struggled with the announcement of an inquiry into its Adelaide casino on Monday, with the stock down -10.2% since then.
Goodman Property Group rose +1.2% following its AGM.
3 Things Markets will be Watching this Week
- Highlights this week include US inflation data and second-quarter GDP data from China.
- Locally, the RBNZ meets with a 50bp lift to the cash rate expected.
- Later in the week all eyes will be on US corporate quarterly earnings announcements, which kick off with the major banks on Thursday.