Global markets were higher on Friday, as the US market recorded its eighth straight positive week and volatility remains suppressed. This has been the longest string of weekly gains for Wall Street since 2013, as a strong Apple result buoyed confidence in the market. We move into the tail-end of the closely watched corporate earnings season in the US this week.
In other news, investors witnessed the appointment of a new US central bank chief – Jerome Powell. Looking at market pricing, the odds for a rate hike in December were unchanged at a high level and the prospect for another rate hike in March is growing.
Closer to home, this week also sees interest rate announcements by the Reserve Bank’s of Australia and NZ (on Tuesday and Thursday).
Stock in Focus: Metro Performance Glass (MPG:NZ)
Shares in Metro Performance Glass have hit all-time lows. While we had flagged MPG as a high-risk investment proposition, we are somewhat surprised at how far the shares have fallen in recent times. MPG have recently announced that they are undertaking a strategic review of the company.
In our last update we noted that MPG disappointed the market as the company appears to be struggling to capitalise on the construction boom. In saying that, there was a sharp share price reaction following the profit warning announcement. The most recent move lower appears to be on the back of industry wide concerns, as well as some large institutional selling of MPG shares. Last week, MPG also announced that its North Island general manager Dean Brown will be leaving the company with effect from Dec. 7 to pursue other opportunities, although we do not see this as necessarily negative news.
We are currently reviewing our recommendation on MPG, and note that the company will provide further guidance when its half year results are released on Monday the 20th of November 2017.
Members should look out for a full update on MPG to be released in our weekly report.
Australia & New Zealand Market Movers
The Australian share market rallied on Friday (ASX 200 index +0.48%) with the ASX 200 market index reaching the 5960 level, bringing the week's gains to 1% and cementing a solid start to November after a barnstorming October. The moves also brought the benchmark measure to its highest levels since May 2015 and once again within striking distance of the elusive 6000-point threshold.
The New Zealand market was lower on Friday (NZX 50 index -0.22%) led lower again by A2 Milk Co while Fletcher Building and CBL Corp rose. A2 Milk remains volatile as its shares fell to $8.15 on Friday. The stock has bounced around the past week, falling as low as $7.45 on Wednesday before rising back to $8.42 yesterday, but is still up a massive 295% this year.
3 Things Markets Will be Watching this Week
1. We move into the tail-end of US corporate profit announcements, with the level of the market making the current earnings season as important as ever.
2. The Reserve Bank of New Zealand makes an interest rate decision Thursday.
3. The Reserve Bank of Australia makes an interest rate decision on Tuesday.
Have a Great Day,
Team