Nearing an end to the NZ Goldilocks?

 

Key developments

While markets performed strongly in November, there were increasing signs, particularly in New Zealand, that 2018 may involve a transition away from this goldilocks environment.

Globally, equity markets continued to inch higher (up 1.3% in US dollar terms), led by the US and Japan. The US reporting season continued to better expectations, and there was a growing positive expectation of tax reform. The ASX200 was up about 1.6% (in AUD) with the best stocks in the property and energy sectors. The oil price was up 5% and iron ore recovered strongly, although base metal prices were weak.

The NZX50 (gross) returned around 0.5% in November, led by companies in the aged care and property sectors. A key feature of the month was the inclusion of F&P Healthcare in the global MSCI index, and other changes which saw massive volumes of stock trade on the last day of the month. November continued to see a large dispersion in announcements from companies at annual general meetings. By and large, globally-facing companies were more optimistic in their view of prospects while there was a more cautious tone to company news in domestically-oriented companies.