Goneburger - Restaurant Brands NZ

The Independent Adviser's valuation range of RBD came in at NZ$8.15 to NZ$8.92. The Directors recommend accepting the offer of NZ$9.45.

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Morning News Summary

US Rebounds as Others Suffer

Global markets were mixed on Tuesday, with the US the only region in the green as a rally in tech stocks helped push the region higher. Elsewhere, Europe and the UK closed lower as oil related stocks weighed, and Asian markets fell on fears the Fed will hike rates on Thursday.

US stocks broadly in the green, led by tech, ahead of Fed meeting

Following a multi-session rout that took the Nasdaq and S&P 500 to their lowest levels since autumn 2017, US stocks staged a modest comeback on Tuesday helped by a rally in tech stocks and some upbeat earnings reports. The S&P 500 rose +0.6%, the Dow Jones Industrial Average climbed +0.9% higher and the Nasdaq Composite added +0.8%. Investors are now focussed on the Fed as it begins its final policy meeting, with an announcement set for Thursday morning, NZ time.

Tech stocks led the way in the US. Oracle burst higher when markets opened after reporting a strong earnings beat, but the shares have since seen gains soften to +0.4%. Other gains in tech came from companies such as Applied Materials (+3.3%), Facebook (+3.1%), Nvidia Corp (+2.9%), Alphabet (+2.4%), Netflix (+1.5%), Amazon (+1.2%), and Apple (+1.0%). General Electric was among the top performers on the S&P 500, with shares jumping +5.1% higher. Boeing snapped a three day losing streak to climb +4.1% higher after it announced a 20% dividend increase and a new share buyback program. Shares of Johnson & Johnson made a modest recovery of +1.3%, having previously fallen -13% in two sessions over a report the company knew of traces of asbestos in baby powder decades ago. Biogen (-5.3%) was a notable underperformer after two analysts downgraded their ratings on the stock.

European and UK stocks weighed by Crude Oil price slump

European equities were dragged into the red by losses from oil and energy related stocks, as crude oil prices slumped. The Stoxx Europe 600 closed -0.8% lower. Declining oil and gas stocks included Lundin Petroleum (+2.6%), Total (+2.5%) and Gazprom (+1.1%).

The UK’s FTSE 100 fell -1.1%, with the energy-heavy index weighed by losses in oil-related stocks, and as investors await outcomes from the Federal Reserve meeting in the US later in the week. Shares of Premier Oil and BP fell -5.6% and -2.2% respectively, while Royal Dutch Shell lost -2.4% after reports the company may be in talks to buy privately owned Endeavour Energy Resources for roughly US$8bn.

Asian markets down on Fed rate hike fears

Chinese President Xi Jinping’s reassuring speech wasn’t enough to shake off worries of a rate hike by the Fed, with Asian markets broadly lower. The Nikkei 225, Hang Seng and Shanghai Composite fell -1.8%, -1.0% and -0.8% respectively.

The ASX 200 slid -1.2%. Declines in energy and bank stocks weighed on the index.

Crude down, gold up and iron ore flat

WTI crude fell -2.2% to US$48.79, while gold rose +0.2% to US$1,248.28, and iron ore remained unchanged at US$69.50/MT.

Today’s events

  • Stats NZ: Balance of Payments - September 2018 qtr
  • ANZ Banking Group AGM
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