“But there’s been two months of stronger-then-expected inflation reports. This might have unnerved the Fed and may mean the central bank doesn’t give the green light (for cuts) as soon as the markets think.”
He said the New Zealand gross domestic product (GDP) release for the December quarter will attract attention, even though it’s old news.
“If the GDP is another piece of evidence that the economy is slowing, then maybe the Reserve Bank will be inclined to take some action by cutting the official cash rate earlier than it’s let on.”
The latest Global Dairy Trade auction saw the index drop a further 2.8 per cent following a 2.3 per cent fall on March 5. Whole milk power was down 4.2 per cent to US$3143 a metric tonne and skim milk powder declined 4.8 per cent to US$2517.
Lister said dairy prices have had a hefty fall and that’s not great for the dairying sector. “We want the payout to be at least $7.80 per kg of milk solids and there’s a risk this could slip away with the way prices are tracking.”
The Warehouse Group increased 10c or 7.35 per cent to $1.46 after reporting a first-half net loss of $23.66m and telling the market it is reducing costs and simplifying its business.
The group is selling or closing TheMarket.com platform by the middle of the year and redirecting online sales through The Warehouse site and app “where there is improved profitability”.
Group sales for the six months ending January 28 were $1.63 billion, down 4.9 per cent and net profit from continuing operations were $31.84m, up 34.6 per cent. The Warehouse store sales declined 4.7 per cent to $965.6m; Warehouse Stationery fell 5 per cent to $117.9m; and Noel Leeming was down 2.2 per cent to $544.4m.
The Warehouse’s bottom-line result was mainly impacted by the $55.5m operating loss and write-down from Torpedo7 which was sold to Tahua Partners for $1.
Lister said “We’ve seen a full set of numbers and know they were underwhelming, but they turned out to be slightly better than expected. There was a relief rally in The Warehouse’s share price after a period of weakness.
“The Warehouse, like other retailers, were facing quite a few challenges with tough market conditions.”
Among other retail stocks, Briscoe Group was down 4c to $4.56; Hallenstein Glasson declined 8c to $6.12; Michael Hill increased 5c or 6.94 per cent to 77c; and KMD Brands was up 2c or 3.92 per cent to 53c.
Spark was up 7c to $5; Summerset gained 10c to $11.10; a2 Milk added 8c to $6.56; Vista Group increased 4c or 2.09 per cent to $1.95; and Vulcan Steel gained 15c to $8.70.
In the energy sector, Mercury was up 16c or 2.37 per cent to $6.90; Meridian was down 4c to $5.755; and Manawa fell 12c or 2.74 per cent to $4.26.
Fletcher Building declined 13c or 3.08 per cent to $4.09; Ebos Group was down 76c or 2.08 per cent to $35.77; Comvita shed 5c or 2.22 per cent to $2.20; and Heartland Group decreased 4c or 3.36 per cent to $1.15.
Rakon declined 6c or 4.96 per cent to $1.17; Smartpay was down 3.5c or 2.39 per cent to $1.43; Eroad decreased 3c or 3.9 per cent to 74c; Accordant Group fell 5c or 7.35 per cent to 63c; and Bremworth shed 2c or 4.08 per cent to 47c.
Carbon Fund fell 16c or 8.79 per cent to $1.66 following the latest auction which saw 2.97m units, or 84 per cent of those on offer, sold at the floor price of $64 a unit, fetching $190.35m. A unit represents one tonne of carbon which emitters surrender to settle their emissions.
