New ZealandNZX Market Wrap-Up:
The NZX50 rallied again yesterday, rising 0.7 per cent. Air New Zealand was the best performer on the day gaining 3.7 per cent, now up 13.9 per cent since the start of the month. Sky TV and Serko were runner up and third place, up 3.5 and 3.0 per cent respectively.
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Fletcher Building had a positive day after it climbed 2.9 per cent to $4.27, its highest price since March. Fletcher's annual shareholder meeting is scheduled for 25 November, at which point management may give guidance on earnings for the 2021 financial year.
The gentailers were also particularly strong, as Contact continued its recent gains to close the day at $7.20, up 8.3 per cent for the month to date. Meridian was the best performing gentailer yesterday, rising 2.8 per cent.
The worst performer was cinema software provider Vista Group, which dropped 3.8 per cent, while Stride Property was down 2.4 per cent. Vista appeared to follow US-listed AMC Entertainment down, which noted that film delays and industry disruption caused by the global pandemic environment are hurting the sector.
International US Markets:
At time of writing, the SPX500 was up 0.3 per cent, the Dow Jones Industrial was up 0.4 per cent and the Nasdaq was down 0.1 per cent.
Utilities and Financials were the best performers on the day, up 1.6 and 1.5 per cent, respectively. On the other hand, Technology and Consumer Cyclicals were the worst performers, down 0.2 and 0.1 per cent.
Game developer Electronic Arts was the worst performing stock on the market, down 3.0 per cent, followed by aerospace manufacturer Boeing which dropped 2.8 per cent on news that it is forecasting a 10 per cent decline in aircraft demand over the next ten years.
The White House has intervened to overturn a CDC order that would have prevented cruises from taking place until February of 2021. The ban is now set to expire at the end of this month. Cruise companies Carnival Corp (up 5.9 per cent), Royal Caribbean Cruises (up 5.6 per cent) and Norwegian Cruise Line Holdings (up 5.5 per cent) were all among the best performing stocks on the market.
On further political news, a recent CNN poll put Joe Biden ahead by 16 per cent in the preferred presidential stakes. This may go some way to sooth fears of a contested election, and any market chaos which that may bring. Investors are likely to be forecasting what a Biden presidency might mean going forward, given he has expressed a greater willingness to impose additional lockdown restrictions than Trump. If the Democrats take the presidency but not the Senate, arguments over the structure of a stimulus package may continue to drag out beyond the election. On the flip side, a "Blue Wave" which sees Democrats in control of all the levers of power might mean greater Government spending, higher taxes, and redistributionism.
Chinese markets remain closed for the mid-autumn festival which runs through to Thursday. The Nikkei 225 was up 0.5 per cent.
The US and 38 of its allies denounced China's human rights record, citing its mistreatment of ethnic minorities in Xinjiang and for limiting freedoms in Hong Kong. China submits that, respectively, it is combatting extremism and that it is dealing with its internal affairs. Companies have already seen backlash for association with Xinjiang with suppliers of Ralph Lauren, Tommy Hilfiger and Nike hit by sanctions for potentially using forced labour, and Disney Co. facing boycott calls following news that the live-action version of Mulan was partly filmed in Xinjiang. Investors should be interested to see if sanctions intensify, further souring relations between China and the west.
At time of writing, Gold was down 0.5 per cent, trading at US$1904.3 per ounce. WTI Crude was up 2.9 per cent, trading at US$40.38 per barrel. The ten-year treasury yield was up to 0.78 per cent.
The ASX 200 finished the day slightly higher, up 0.4 per cent after positive
announcements surrounding President Trump's recovery from Covid-19. The index wavered throughout the day before finishing up after the announcement of the RBA advising it would keep interest rates at 0.25 per cent, and to expect further increases in fiscal policy.
The Academic and Educational Services sector (+3.2 per cent) was the key outperformer on the day after underperforming since Friday. On the other hand, Healthcare (-0.7 per cent) and Real Estate (-0.6 per cent) were laggards, with Nanosonics (-4.7 per cent) and Mesoblast (-4.2 per cent) leading the index down.
Northern Star Resources and Saracen Mineral Holdings have agreed on a A$16 billion dollar merger with close to $2 billion of synergies likely to be realised. The Saracen shareholders will receive 0.3763 Northern Star Resources shares for each share held, along with a 3.8 cent special dividend. The announcement led shares in both companies to skyrocket with Northern Star up 10.7 per cent and Saracen up 9.6 per cent.
Fresh off the hype of the above deal, speculation has continued for the possible merger of Janus Henderson and Investco, after analysts noted that Trian Partners has accumulated a 9.9 per cent stake in each company. The share price of Janus Henderson has been on a continued downward path since 2017, but since merger rumours began on 23 September it has risen by approximately 30 per cent. Similar to the Northern Star – Saracen deal, large synergies are possible between Investco and Janus given the former has over 1.25 trillion in assets under management.
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