We are constructive heading into 2021 given the backdrop of cheap money and an economic recovery boom. However, we remain cognizant of risks such as issues with vaccines, higher inflation/interest rates, and central bank / government policy missteps.
NZ Cabinet has agreed in-principle to establishing a travel bubble with Australia within the first three months of 2021. The arrangement will depend on there being “no significant change” in the Covid-19 situation in both countries, and the bubble getting
Treasury Wine Estates plummeted -11% on Friday after Beijing said it would impose tariffs of 107–212% on Australian wine imports after alleging dumping into the Chinese market.
Global markets surged overnight (S&P 500 Index +2.3%) after Pfizer revealed its COVID-19 vaccine has been 90% effective against the dominant virus strains circulating currently.
The backdrop of a second wave of COVID-19 and fresh lockdowns in Europe and now the UK, mixed earnings from big technology companies and this week's Presidential election has investors on the side-lines.
While large, we would put the overnight moves in context - markets are generally still in positive territory for the month and it is very early to panic. There is likely to be continued volatility as we head into the US election in a weeks time.
It is set to be a busy week ahead with the focus on quarterly reporting season in the US and a number of AGM’s in Australia/NZ.
Banking stocks jumped on Friday after the Australian Federal Government announced it would loosen responsible lending laws as part of its economic recovery plan. Among the big four banks, Westpac was the strongest on Friday surging +7%.
In terms of the week ahead, investors will be looking for guidance from the world’s Central Bankers as they meet (virtually) at the Jackson Hole symposium. The topic this year is “Navigating the Decade Ahead: Implications for Monetary Policy”.
Closer to home, NZ lockdown extension measures were announced that were largely "as expected", and the NZX has opened higher this morning. With the ASX market reaction to Melbourne a good case study, our view is that the NZX is currently pricing in a shor
