Costco has established itself in New Zealand but its US operation reported poor November sales. Photo / NZME
Keeping you up to date with the latest market moves, in association with Investment firm Jarden.
International
US
It was a busy day of economic data in the US with information released on jobless claims, Personal Consumption Expenditure Index, personal income, personal spending and the ISM Manufacturing Index.
Initial jobless claims came in lower than expected but continuing claims surged above 1.6 million. Inflation data was roughly in line to slightly better than expected.
Personal income was well above expectations (0.7 vs 0.4 per cent) while personal spending came in line with estimates (0.8 per cent). In response to the data, futures have been ticking higher.
Despite all this, key indices, such as the Dow Jones Industrial Average, decreased by 0.8 per cent, reversing the jump on Wednesday after reacting to the Federal Reserve’s broad comments on a possible slowdown in interest rate increases.
International retailer Costco Wholesale reported November sales that were weaker than expected from management. Following this, the company’s shares decreased 6.8 per cent.
Sales for the four weeks ending Sunday 27th November rose by 5.7 per cent to US$19.2 billion from October, a slowdown compared to the previous month-on-month increase of 7.7 per cent and 10.1 per cent in September.
Same-store sales for the same period were up 4.3 per cent, a far cry from the consensus forecasts of 7.7 per cent. E-commerce sales fell in the double digits of 10.1 per cent.
Software company Salesforce announced Bret Taylor is stepping down as Co-Chief Executive, leaving Marc Benioff alone at the helm.
Following this statement, the company’s shares went down 10.4 per cent.
Taylor was promoted to the position a year ago from the role of President and Chief Operating Officer. Benioff has said Taylor left to startup a new company of his own. Taylor made a US$22.8m of total compensation in the fiscal year of 2022, mostly from stock awards, which had been up from US$13.9m.
Rest of World
Online retailer ASOS has changed its bonus targets for Chief Executive Jose Antonio Ramos Calamonte next year.
The £1.1m (NZ$2.1m) pay-out linked to revenue growth is to fall from 30 to 15 per cent. The share linked to cash flow is up 35 per cent, as cost cuts are set to also be rewarded. Calamonte had taken the position from Nick Beighton in June and acknowledged the full year results in October showed excessive inventory stocking.
Investors will be able to vote on 11 January on the remuneration policy.
The Hang Seng and Shanghai Composite had another day of rises, up 0.8 and 0.5 per cent respectively as numerous districts in Guangzhou and Shanghai were relieved from their lockdown measures on Thursday.
China’s Vice-Premier says they now deal with a “new situation” of epidemic prevention as they claim the ability of Covid to cause disease is weakening, sharply contrasting earlier messages of the zero-Covid policy. Mass protesting over the weekend has led to continued heavy police presences throughout China’s major cities.
Commodities
The European Commission has proposed a price cap on Russian oil at US$60 per barrel, setting the price significantly below the international benchmark which traded at US$87.8 per barrel on Thursday.
This comes as an attempt to reduce the Kremlin’s oil revenues and keep global supplies steady while avoiding an increase in prices. The seven countries and Australia aim to have it in place by 5 December 2022.
Australia
Pizza chain operator Domino’s Pizza had its shares halted until Monday 5 December, with the announcement of a A$165 million capital raise to fund a German joint venture with a share placement at a 2.0 per cent discount to current shares.
A$150 million of these shares have been underwritten while the remaining $A15 million are to be placed under a share purchase plan.
A further trading update has been given for guidance on their fiscal year of 2023, where Domino’s Malaysia, Singapore and Cambodia are all trading in line with expectations.
New Zealand
Centrix released its Credit Indicator report, showing arrears for loan repayments rose 5.0 per cent year on year in the month of October.
This is a rise to 400,000 from 375,000 people but it’s notable that this figure is still less than the figure in December (pre-Covid).
15,200 mortgage accounts have been shown to currently be past their due date, representing 1.03 per cent of the total count.
“New consumer lending has climbed for the last three months, and the looming festive season is likely to be a source of stress for many Kiwis who are already dialling back their discretionary spending,” said Centrix Managing Director Keith McLaughlin.
After trading closed on Thursday, Salmon wholesaler New Zealand King Salmon provided notice of an appeal by The Department of Conservation to start open water salmon farming operations in Cook Strait, where the Department said it wanted to place conditions on the consent.
Should these changes be made, they will not oppose the granting of the consent. Management will be heading into mediation with The Department of Conservation and any other parties interested in the new year.
This move to colder waters in the Cook Strait follows an increase in fish mortality because of rising water temperatures, compounded by the impact of Covid on sales.
Coming up today
New Zealand has nutrition company Synlait Milk hosting its AGM today.
Australia will similarly have one AGM; of retail, importing and distributing investment company Premier Investments. Lending indicators for October are set to be released by the Australian Bureau of Statistics.
For more information on the latest market moves, get in touch with Jarden.
All market pricing and announcements are sourced from Refinitiv, NZX and ASX.
The Jarden Brief is provided for general information purposes only. It reflects views and research available at the time of publication, using external sources, systems and other data and information we believe to be accurate, complete and reliable at the time of preparation. We make no representation or warranty as to the accuracy, correctness and completeness of that information, and will not be liable or responsible for any error or omission. The Jarden Brief is not to be relied upon as a basis for making any investment decision. Please seek specific investment advice before making any investment decision. Jarden Securities Limited is an NZX Firm. A financial advice disclosure statement is available free of charge at https://www.jarden.co.nz/our-services/wealth-management/financial-advice-provider-disclosure-statement/.
Full disclaimer available at: https://www.jarden.co.nz/wealth-sales-and-research-disclaimer>
Walter & Wild, the new owner, initially placed Hansells into receivership.