NZ EQUITY STRATEGY
Portfolio Considerations: NZ's Safe Harbour
Contrary to the “safe harbour” thematic, NZ's top 10 stocks are more sensitive to global macro-crises than the rest of the market.
Global Stocks Mixed On Earnings
Global markets were mixed as investors weighed corporate earnings ahead of economic data releases.
US stocks halt near all-time highs
US stocks fluctuated near all-time highs amid a mix of corporate results as investors await data due to be released on Friday on the strength of the US economy. At the time of writing the S&P 500 was unchanged, while the Dow Jones Industrial Average slid -0.2%.
Ford sank -9.7% after earnings missed estimates, while General Motors dropped -3.8%. Facebook pared a gain of +1.6% on sales that topped forecasts. MasterCard advanced +1.2% after saying profit rose +6.7% as customer card spending increased. Among technology companies, GoPro rallied +13.1% after posting an adjusted loss that was narrower than estimated while Amazon.com added +1.3%.
European and UK stocks lower on corporate earnings
European stocks dropped as investors assessed a slew of earnings reports and lenders fell before Friday’s stress-test results. The Stoxx Europe 600 slid -1.0%. Telefonica declined -4.5% after sliding currencies in Latin America dragged on earnings. Adidas gained +2.5% as it raised annual forecasts for revenue and profit. Anheuser-Busch InBev fell -2.5% after SABMiller (+2.2%) suspended internal work on integrating the two brewers while SAB’s Board considers whether to recommend AB InBev’s higher revised offer to shareholders.
The UK’s FTSE 100 dipped -0.4%. Royal Dutch Shell slid -2.9% after posting profit that was about half the average analyst estimate due to corporate charges (operating results were -8% below expectations). Lloyds fell -5.8% after lowering its guidance for 2016 capital generation, stoking concern about dividend growth. AstraZeneca climbed +7.2% after management targeted growth in sales to at least US$40bn by 2023. Rolls-Royce jumped +14.0% after saying it’s on course to deliver a stronger second half of the year.
Asian stocks approach nine-month high, Japanese stocks lower on Yen
Asian stocks rose toward a nine-month high after the Federal Reserve left interest rates unchanged and signalled a gradual approach to tightening. The MSCI Asia Pacific Index gained +0.2%, while the Shanghai Composite Index closed +0.1% higher, reversing earlier losses of as much as -0.8%. The stronger yen drove Tokyo shares lower as investors awaited the Bank of Japan’s policy decision on Friday. Japan’s Topix dropped -1.1%.
ASX 200 gains
The ASX 200 added +0.3%. Rio Tinto climbed +2.1%, pacing gains among mining companies as copper and iron ore advanced.
Crude and gold lower, iron ore unchanged
WTI crude fell -1.9% to US$41.13 while gold slid -0.4% to US$1,334.93
StatsNZ: Building Consents Issued - June 2016
AGM: BIL, BLT, KFL, KPG, MOA
MRP Name change - Mercury NZ (MCY)