Morning report

Vaccine Push Lifts Equities

Global markets were broadly in the green to start the new week, with positive vaccine updates and a better than expected start to earnings season leading investors to gloss over the continuing surge in new COVID-19 cases. Equities in the US, UK, Europe and Asia Pacific regions were all comfortably higher.

US stocks in the green

The US Food and Drug Administration granted fast track status to a pair of COVID-19 vaccines from Pfizer and Germany's BioNTech (+10.8%). The S&P 500 rose +1.0%, the Dow Jones Industrial jumped +1.6% and the Nasdaq Composite added +0.4%. The S&P 500 is not far from erasing year-to-date losses. Shares of PepsiCo were up +1.6% after its second quarter profit and revenue dropped less than expected thanks to resilient food and beverage sales amid the COVID-19 pandemic. Shares of Pfizer, which surged +5.4% on the positive vaccine news, and Apple, which jumped +2.0% after a broker valued the company at US$2tn, supported strong gains in the Dow Jones. Shares of Tesla continued their meteoric rise early in the day, but come back down to earth to sit +1.2% higher, as expectations grow that it will enter the S&P 500 index. In merger and acquisition news, chip maker Analog Devices (-3.8%) announced it had agreed to acquire Maxim Integrated Products (+10.9%) in a US$21bn deal.

European and UK stocks climb ahead of earnings season

Optimism for a steady second-quarter earnings season in Europe, combined with a strong start to the week in the US, lifted European stocks. The Europe Stoxx 600 closed +1.0% higher, with shares of companies due to report in the next week on the rise, such as Ericsson (+1.6%) and ASML (+1.4%). Ubisoft slumped -5.0% after announcing a shake up in management.

The UK's FTSE 100 climbed +1.3%, tracking gains in European peers as the region gears up for the reporting season. Shares of Mining majors Rio Tinto (+3.1%) and BHP Group (+2.4%) gave a big boost to the blue chip index as the companies prepare to report quarterly production numbers.

Asia Pacific stocks charge higher

Positive expectations for China's April-July economic growth data gave equities in the Asia Pacific region a boost. Shares in China and Japan were particularly strong, with the Nikkei 225 (+2.5%) and Shanghai Composite (+1.8%) surging, while the Kospi climbed +1.6% and the Hang Seng added +0.2%.

Strong gains in the heavyweight Australian banking and mining sectors helped lift the ASX 200 by +1.0%. Treasury Wine Estates surged +4.2% after a broker raised its rating and target price on the stock.

The NZX 50 climbed +0.4%, lifted by gains across Asia as positivity from the US's strong close on Friday spilled over. Chorus recovered +2.8% following Friday's sharp loss when the Commerce Commission indicated a change to how it regulates the telco.

Crude oil and gold prices up

WTI crude oil added +0.2% to US$40.63 while gold added +0.6% to US$1,809.25.

NZ Headlines

Tiwai Point aluminium smelter's signalled wind-down next year has forced Transpower to expedite at least NZ$650m of transmission upgrades to the national grid, with current work now deemed critical.

Today's Events

  • No events today
If you want to monitor price movements and follow key global indices, commodities and currencies on the go, the Forsyth Barr Investment Insights App is available for Apple and Android devices.
Packed with features, the app lets you keep connected to the world of investing. 

 

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.