Devon Funds Morning Note - 21 April 2026

Tuesday 21st April 2026

Contained Movements

Global

US markets slipped modestly overnight as renewed US-Iran tensions and a fresh shutdown of the traffic through the Strait of Hormuz pulled markets back into focus on geopolitical risk after a turbulent weekend. The S&P 500 fell 0.2%, the Nasdaq declined 0.3%, while the Dow was relatively flat to begin the week.

Oil rallied, driving stocks lower as President Trump announced that the Strait of Hormuz will not open until a deal is signed, “I’m not going to be rushed into making a bad deal…we’ve got all the time in the world”. Going on to clarify that the ceasefire will now expire on Wednesday evening Washington time (original expiration was Tuesday evening). Reports from the US Central Command showed an Iranian-flagged cargo ship tested this in the Gulf of Oman and was ultimately disabled by the US Navy after repeated warnings. Amongst this, VP Vance, Kushner, and Witkoff are heading back to Pakistan for another round of negotiations, while Iran says it will not send negotiators.

US market response is relatively contained, with many still seeing a de-escalatory path and expecting a second round of talks to eventually deliver a deal. Banks led the market with a 1.2% gain overall, while the only real softness was mainly in Tech, where the Magnificent 7 slipped 0.5%, nudging the Nasdaq lower after a 13-day winning streak, the longest since 1992.

Elsewhere, ECB President Lagarde reinforced the view that next week’s meeting is too soon for a rate hike, stressing the “double uncertainty” around both the duration of the Iran shock and how fully it passes through to prices, and arguing the ECB needs more data before changing policy.

In Canada, headline CPI jumped from 1.8% to 2.4% in March, though this was a touch below expectations, while the average of core measures eased to around 2.25%; markets largely shrugged off the data, and pricing still implies little chance of near term moves from the Bank of Canada.

New Zealand

The NZX 50 started the week on firmer footing, adding 0.1% to the index. The move snapped a two-day losing streak, with outperformers including Delegat Group (+3.2%), Gentrack (+2.2%) and Fletcher Building (+2.1%). Detractors included Fonterra Co-operative (-2.6%), Briscoe Group (-2.0%), and Mercury NZ (-1.5%).

Fletcher Building has cleared the major regulatory hurdles for its construction division sell down, with the Overseas Investment Office granting consent and the Commerce Commission confirming it won’t review the deal further. Completion of the sale to VINCI Construction now hinges mainly on counterparty consents and internal restructuring and is expected to close by the end of FY26.

Channel Infrastructure has said it is adding 93 million litres of diesel storage at Marsden Point under a short term deal with the New Zealand Government, supporting fuel security and boosting its regulated, PPI linked revenue stream.

KiwiSaver saw a notable spike in early withdrawals granted in March, recording $297m, surpassing the previous high of $255m set in November. The 10,990 withdrawals were almost evenly split between hardship (5,610 cases) and first home purchases (5,380), highlighting that more members are tapping retirement savings both to get onto the property ladder and to plug immediate cash flow gaps.

IAG’s latest Wild Weather Tracker underlines how sharply climate-related losses have escalated for New Zealand insurers. The report shows 47 natural hazard events in the year to 28 February, triggering 33,214 claims, up from 31 events and 9,371 claims a year earlier, pointing to both a higher frequency and severity of weather driven damage across the country.

Australia

The ASX 200 followed the same pattern, adding 0.1% at the close as the market continued to consolidate in what can be described as a slow session to start the week. Across sectors, Discretionary rebounded, reaching its highest level, along with Staples. Within the space, supermarkets came out on top with Coles and Woolworths both adding 1.2% and 1.9%, respectively.

Tabcorp jumped 6.0% after the Victorian gambling regulator signed off on the rollout of its TAB Live in-play betting product across pubs and clubs, a key milestone in its strategy to revitalise the retail network and differentiate from pure online rivals.

Real estate investment trusts outperformed, rising about 1.0% as a pullback in bond yields provided some much needed relief for this rate sensitive sector. With Australian government bonds rallying and yields dropping roughly 5–6 basis points across the curve, the discount rate pressure on property valuations eased a touch, helping A REITs claw back some of the underperformance they’ve suffered as yields pushed towards 5% this year.

On the flip side, Energy underperformed as the sector fell 3.0% overall, though WTI and Brent advanced. Viva Energy weighed on the sector, as the company fell 9.1% at reopening after the Geelong refinery fire. Banks remained in focus, with NAB falling 3.6% on its update, while Worley became the next company to downgrade earnings due to the impacts of the Middle East conflict, with earnings estimated to be in the range of $30-$40m.

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