26 August 2021

Welcome to volume VI of Stock Take, Stockfox’s weekly update about the share market. We hope our New Zealand-based readers are staying safe and positive during the Covid lockdown. Here’s what’s new in the markets.

Market Overview

After lagging the Australian (blue line) and United States (green line) markets for the past six months, the New Zealand exchange (purple line) has performed strongly the past week.

This is despite the country continuing to suffer from an outbreak of the Covid-19 Delta variant, which has caused the economy to grind to a halt. The lift in the market could be an example of ‘the lockdown effect’, whereby people stuck in their homes with little in the way of entertainment begin to trade more actively on the stock exchange. This has been a pattern of previous lockdowns, where trading volumes have lifted significantly.

Another factor is likely to be hints dropped by the Reserve Bank that, if it weren’t for the lockdown, they would have lifted the Official Cash Rate by now. International investors may be bringing money into the country in anticipation of rates lifting once the lockdown is lifted, at which time it could be expected that the New Zealand dollar will rise.

Whatever the reason, we encourage investors to ‘let the trend be your friend’ and stay invested in the New Zealand market while it continues to trend upwards.

Tip of the week

This week’s tip of the week is for a NASDAQ-listed company that sells a broad range of pop culture consumer products. The company is showing rapid growth in online sales and has very solid overall sales thanks to its collaboration with some of the biggest brands in the entertainment business.

Read the tip here.

Top Tips

See the results of our best performing ASX tips over the past three months.

See the performance of all Stockfox tips here.

What’s New

It won’t come as a surprise that Covid-19 lockdowns impact the share market, but the all important questions are how and what should investors do about it.

We’ve written an article on the topic, which you can access on our website or in the Learn section of the Stockfox app.