28 June 2021 | Weekly Snapshot

Did you know?

In 2005, an inexperienced trader at a Japanese bank tried to sell 1 share of J-Com stock for 640,000 Yen. He accidentally sold 640,000 shares for 1 Yen each: the equivalent of selling $3 billion worth of stock for the price of $5,000. The Japanese bank still lost $225 million even with most trades being cancelled, wiping out the year’s profit.

Market Movements

Australian Share Market (ASX200) – Down 0.8% last week. Profit taking finally hit after a month worth of rallies. The healthcare sector, banks and energy stocks reversed gains but were offset partially by the tech sector +3% and materials stocks (miners) +2.25% responding positively to the US infrastructure bills approval. Woolworths dropped 10% reflecting their spinoff of Dan Murphy’s through Endeavour drinks in a separate entitlement for shareholders.

US Share Market (S&P 500) – Up 2.74% last week. The US market had its best week since February after the previous week’s worse period since October. The market was buoyed by accelerating world economies and additional US Federal stimulus with a $1 trillion infrastructure plan given the go -ahead. Volatility levels dropped to their lowest levels indicating increased consumer confidence in equity markets.

Portfolio Movements

Nike (NKE.NYSE) has benefited from Americans leaving lockdown and splurging on footwear and apparel, taking over from leisure wear and comfortable pajamas as profit and revenue topped estimates. Nike’s biggest market, the US, saw revenue double to $5.38B beating estimates of $4.31B. Margins increased by 850 basis points to 45.8% over a year boosted by the company’s direct to consumer business and fewer changes to factory cancellations. Analysts had expected margins to come in at 43.9%. In China where Nike was attacked on Chinese media, revenue of $1.93B understandably missed $2.22B expectations. Overall total revenue doubled to $12.34B against $11B expected, helping lift shares over 14% in after- hours trading.

Volkswagen (VOW3.ETR) has announced that it will be using a new 3D printing process called binder jetting to manufacture car components at its main plant in Wolfsburg Germany. Binder jetting uses adhesives as each layer is built. The resulting metallic component is then heated and shaped. The resulting components weigh only half as much as sheet steel thereby dramatically cutting the running costs and improving fuel efficiency. VW is the only car maker using this technology, but GE has been using a similar product to create components for jet engines for years. HP is providing the high-tech printers needed and Siemens the special software for additive manufacturing.

Fortescue (FMG. ASX) has signed an option to acquire portside land in northern Tasmania to build a 250-megawatt green hydrogen plant. FMG has pledged more than $1B a year (10% of annual profits generated by its core iron ore mining operations), into their future industries initiative. FMG is well on the way to becoming Australia’s primary exporter of renewable green energy. The Tasmanian plant will require up to $500M to build and will produce 250,000 tonnes of green ammonia for domestic use and exports. It would create 500 jobs and deliver a net $2B to Tasmania’s gross product.

The week ahead

Domestically, a quiet week with the reserve bank governor delivering a speech Wednesday, with the balance of trade being released the next day.

The US releases their balance of trade, construction spending, non-farm payrolls, average hourly earnings and unemployment figures all on Friday. China releases manufacturing PMIs, Japan has unemployment rates, retail sales, consumer confidence and industrial production figures and the EU releases PPI inflation figures, manufacturing PMIs and Unemployment rates.