Morning report

Stocks End Week on a Downbeat

Equity markets were mixed on Friday as investors weighed hopes for a COVID-19 vaccine against a worsening pandemic, a curfew in California and the outgoing Trump administration withdrawing some of the Federal Reserve pandemic-fighting tools. The UK and Europe finished higher on a commodity rally, as did most of Asia.

Wall Street closes lower

US equities closed in the red as rising COVID-19 cases and tension between Trump's Treasury Secretary and the Federal Reserve raised doubts about economic recovery. Steven Mnuchin announced late on Thursday that he would allow key pandemic-relief lending programmes at the Fed to expire at the end of the year. California's Governor announced a curfew starting from Saturday. The Dow Jones fell -0.8%, S&P 500 dropped -0.7% and the Nasdaq closed -0.4% down. Pfizer (+1.4%) said on Friday it would file for approval from US regulators for emergency use of its vaccine. Gilead Sciences fell -0.9% after a WHO panel recommended against doctors using the company's remdesivir drug to treat coronavirus patients. Stay-at-home stocks, such as Zoom (+6.1%) and Netflix (+0.7%), helped curb the Nasdaq's losses. Homeware retailer Williams-Sonoma gained +6.6% after releasing a strong result. Software companies Workday (-9.3%) and Intuit (-3.8%) underperformed despite reporting better-than-expected earnings and issuing upbeat guidance . Nike gained +0.8% after it said it was raising its quarterly dividend by +12%.

Commodity rally leads UK and Europe higher

The Stoxx 600 closed +0.5% higher and added +1.2% for the week; and the UK's FTSE rose +0.3% and booked a +0.6% weekly gain. Data showed British retail sales rose by a higher-than-anticipated +1.2% in October ahead of recent restrictions, while consumer confidence sank to a six-month low in November. Miners including Glencore (+2.4%), BHP (+1.5%) and Rio Tinto (+1.2%) rose as metal prices rallied on continued strong demand in China and potential supply disruptions. Sage Group tumbled -13.4% after the software firm reported a -3.7% drop in full year organic operating profit.

Asian markets were a mixed bag

Most Asian markets ended flat or modestly higher. The Shanghai Composite and the Hang Seng gained +0.4%, while Japan's Nikkei 225 ended with a -0.4% loss. Japan's core consumer price index fell -0.7% y/y in October, the most in over ten years.

The ASX 200 closed down by -0.1%. October retail sales rose +1.6% m/m, helped by the end of Victoria's lockdown. Commonwealth Bank (+1.4%) finished best of the big four after the Australian Prudential Regulation Authority wound back its requirement that the bank carry an extra A$1b in risk capital by A$500m. Insurer IAG will raise up to A$750m through a share sale after a NSW court ruled insurers have to pay compensation to business customers affected by the pandemic.

The NZX 50 slipped -0.9%. Ryman Healthcare lost -2.0% after its result came in below expectations.

Crude, gold and iron ore all rose

WTI crude rose +1.4% to US$42.42, gold rose +0.2% to US$1870.49 and iron ore added +0.5% to US$122.84/MT.

NZ Headlines

NZX-listed aged care provider Ryman (RYM) reported a soft 1H21 result, driven by weaker than expected resales gains. The company expects its biggest-ever cash collection in the second half of its 2021 financial year, as developments delayed by COVID-19 become occupiable.

Today's Events

  • Goodman Property Trust 1H21 result
  • Kiwi Property Group 1H21 result

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This morning summary has been provided by Forsyth Barr Ltd and is for general information purposes only - your financial situation or goals have not been taken into account. If you would like more information or advice that is specific to you, talk to your Authorised Financial Adviser.