Australia and New Zealand Market Movers is provided by: Australasian Trading Management.
The Australian share market was slightly higher on Tuesday (ASX 200 index +0.15%) supported by energy, health care and consumer-exposed stocks, as US President Donald Trump and North Korean leader Kim Jong-un held talks aimed at denuclearisation of the Korean peninsular. In stock news, Caltex shares were higher as it said expects first-half underlying profit to improve by as much as 7%, with strong wholesale performance helping to offset lower retail fuel margins and the overhaul of its convenience store network. Costa Group shares also jumped on the back of a positive broker report.
The New Zealand market was a touch lower yesterday (NZX 50 index -0.01%) in light trading as some stocks gave up dividends, with the focus on the US-North Korea summit in Singapore. In stock news, Vista Group has signed up French cinema chain Les Cinémas Pathé Gaumont for its cinema management software which will be rolled out in 69 sites. The French chain is taking up a full suite of Vista’s software including “Vista Cinema’s food & beverage functionality to operate their Starbucks coffee venues and other specialised food & beverage offerings, and the innovative offerings of digital signage, Vista app ‘InTouch’, film programming and analytics, among other applications”.
Global markets were mixed overnight as shares on Wall Street edged higher, with help from Twitter and media stocks. The market reaction to the historic United States-North Korea summit in Singapore was muted.
US President Donald Trump and North Korean leader Kim Jong Un pledged to work toward complete denuclearization of the Korean peninsula while Washington committed to provide security guarantees for its old enemy. However, few details were provided publicly.
In an event heavy week, investor attention will now be on tomorrow morning’s (AU/NZ time) Federal Reserve policy meeting announcement. As we have discussed in the past, we see the pace of interest rate moves higher (driven by the US) as a key driver of markets this year. All else equal higher interest rates are a negative for the economy and stock markets, although the pace of moves is crucial in terms of the market impact.
Stock in Focus: Wisetech Global (WTC:AX)
Shares in logistics software as a service company have staged a remarkable comeback since April, with the stock trading back at all-time highs yesterday.
The high-flying tech stock had pulled back sharply earlier in the year as its half year revenue and profit growth failed to match lofty market expectations. At the time this reinforced our concerns around the company’s expensive valuation, which can see even a slight miss to the markets expectations result in a sharp share price move.
However, Wisetech shares have surged higher on the back of upgraded revenue growth guidance released in May (it now expects revenue growth of between 37% to 43%). WiseTech has also continued its aggressive approach to acquisitions which look to have been well received by the market, with the latest purchase being Canadian customs management solutions provider Fenix Data Systems, for $2.5million.
3 Things Markets Will be Watching this Week
1. Geopolitics as US President Trump meets with North Korean Leader Kim Jong-un on Tuesday.
2. The US Federal Reserve makes an interest rate decision Thursday morning (AU/NZ time)
3. Trade tensions with the US remain in focus following the G7 summit over the weekend.
Australia and New Zealand Market Movers is provided by Australasian Trading Management. ATM is an independent research house covering stock analysis across major markets including the ASX, NZX and US markets. We make our research easy to understand and concise, taking complex issues and simplifying them so that you can make informed and accurate decisions. We have no conflicts of interest and our only goal is to generate positive returns for our members. We run transparent model portfolios to track performance and invest where we see the most value, in companies of all sizes across all industries, and often in smaller companies.
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