Research Team, 15 March 2019

It was a mixed week for global markets as Brexit uncertainty and concerns of global growth continued to weigh. Back home house prices continued to rise (with the exception of Auckland), while volumes decreased sharply. In the US, shares of Boeing came under pressure following the grounding of its 737 MAX aircraft across the globe.

In corporate news, shares of Restaurant Brands touched new record $9.00.

This comes after Finaccess Capital announced its partial takeover bid for the company at $9.45 had gone unconditional. The owner of KFC in New Zealand recently reported a strong result, posting 7.2% growth in annual sales, driven by its overseas operations.

At the other end of the spectrum, shares in Sky TV bounced off record lows while Fletcher Building weighed on the local benchmark as investors contemplated ongoing headwinds in the real estate and construction sectors.

REINZ data for February saw median house prices rise but volumes fall.

Median house prices across New Zealand increased 5.7% in February to $560,000, climbing to a new record high. Excluding Auckland, the median house price increased 8.1%. Auckland continued to buck the trend, declining 2.0%. The number of days to sell a house increased to 47 days from 44 days a year earlier, while, volumes were down 9.5%. Auckland volumes were hit harder, down 17.9%. Gisborne and Manawatu/Wanganui saw the biggest increase on the year, rising 25.8% and 23.4%, respectively, while Southland (+20.8%) and Wellington (+16.2%) posted solid gains.

British lawmakers on Wednesday rejected Prime Minister Theresa May’s deal to leave the European Union.

Paving the way for a vote that could delay Brexit until at least the end of June. Lawmakers defied the Government by voting 321 to 278 in favour of a motion that ruled out a ‘no deal’ Brexit under any circumstances.

Slowing global growth remains a key concern for investors.

Late last week, the US jobs report showed the US economy added just 20,000 jobs in February compared to an expected gain of 180,000, marking the weakest month of jobs creation since September 2017. Separately, Chinese trade data showed exports fell 20.7% on the year last month, missing expectations of a 4.8% decline.

In economic news, the US consumer price index rose 0.2% in February.

Its smallest annual increase since June 2017. The figure matched market expectations and gave some investors a reassuring sign that the Federal Reserve will continue to hold off on further interest rate cuts. Many expect the central bank to be even more dovish at its policy meeting next week.

Staying in the US, shares of Boeing posted their biggest two day drop since June 2009 amid worries over the safety of its planes.

The US, UK and China all announced they have grounded the company’s 737 MAX model, following steps already taken by Europe and other nations following Sunday’s crash in Ethiopia. It marked the second fatal crash in months. At the time of writing, shares of Boeing were down 10.7% for the week.

Across the Tasman, the Australian dollar skidded lower after a consumer confidence gauge triggered fresh concerns about a slowing economy.

A measure of Australian consumer confidence slumped to its lowest in over a year in March, adding to recent signs of weakness in the economy.