Colonial Pipeline transports more than 2.5 million barrels of fuel every day. Photo / AP
Keeping you up to date with the latest market moves, in association with Investment firm Jarden
Coming Up Today:
The UK will release GDP figures. Investors may be interested in the impact that these numbers have for continued European stimulus. Chinese CPI numbers are to be released which will provide another data point in the building inflation narrative. In New Zealand, Meridian will hold its investor day, the ANZ truck-o-meter stats will be released and April card spending numbers will be announced.
New Zealand:
The S&P/NZX 50 traded in the red yesterday with the index dropping 0.6 per cent to 12,659.0 points.
The leading sectors comprised of both Energy and Consumer Cyclicals, making gains of 2.9 and 0.5 per cent respectively.
Farming products Manufacturer Skellerup Holdings Ltd led the way with a strong performance, up 3.5 per cent at yesterday's close. Similarly, fuel retailer Z Energy Ltd continued to trade well on the back of its full-year results last week, advancing 2.5 per cent to finish as the day's second-largest gainer.
On the flip side, Consumer Non-Cyclicals (down 5.6 per cent) and Technology (down 0.9 per cent) were the laggard sectors at yesterdays close.
Weighing down on index performance was a2 Milk, as investors reacted to a market update released early yesterday morning. The update confirmed that significant headwinds would continue for a2 Milk into the foreseeable future. The company revised earnings guidance to $1.2bn from $1.4bn (issued in February). The downgrade coincided with the resignation of Asia Pacific CEO Peter Nathan. Two pieces of bad news did not bode well for the company, finishing the day down 12.9 per cent at $6.6.
Synlait Milk was also affected by the string of bad news for a2 Milk, trading down 5.9 per cent in sympathy.
In other news, an update is expected this week from NZ telecommunications company 2Degrees following talks of a potential IPO. Two Degrees is currently owned by Canadian based Trilogy International Partners, which announced through its website that it was exploring options to list its kiwi assets in the second half of 2021 or early 2022.
International Markets:
US Markets
The US Department of Energy is monitoring potential impacts to national energy supply due to the Colonial Pipeline shutdown following a cyberattack. Colonial Pipeline transports more than 2.5 million barrels of fuel every day and accounts for about 45 per cent of all fuel consumed on the heavily populated US East Coast. As more of our world goes online, the exposure of public infrastructure to cyberattacks could be a theme that becomes more prevalent in the minds of the public going forward.
At the time of writing, all three major US indices were down. The SPX 500 was down 1.0 per cent, the NASDAQ was down 2.6 per cent, while the Dow Jones fell just 35 points.
Utilities (up 1.6 per cent) and Consumer Staples (up 1.2 per cent) and Energy were the sectors lifting the S&P 500 the most during the session's trading.
The bottom sectors, at the time of writing, were Information Technology and Communication Services, down 1.43 and 1.1 per cent, respectively.
The market-leading stocks included healthcare product manufacturer Viatris Inc (up 9.0 per cent), concert ticketing platform Live Nation Entertainment (up 6.2 per cent), and diversified fashion and retail company L Brands Inc (up 4.5 per cent).
The worst performing equities included radio frequency solutions provider Qorvo Inc (down 6.2 per cent), dental solutions company Align Technology Inc (down 5.4 per cent), and semiconductor processing equipment manufacturer Lam Research Corp (down 5.4 per cent).
On Friday, the US government published the labour market statistics for the month of April. Payroll employment rose by 266,000 and the unemployment rate stayed relatively unchanged at 6.1 per cent. New payrolls missed forecasts for 1 million new jobs and May forecasts were revised downward to 770,000 from 916,000.
Investors are looking ahead to the government's consumer prices update scheduled for Wednesday.
Asian Markets
The popular Asian indices were generally up at time of writing. The Shanghai index (China) was up 0.3 per cent; the Shenzhen index (China) was up 0.1 per cent; the Nikkei (Japan) was up 0.6 per cent; and the Hang Seng (Hong Kong) index was down 0.1 per cent.
Commodities
It was a relatively quiet session for precious metals. Gold was trading at US$1,836.90 per ounce (up 0.3 per cent); while Silver was trading at US$27.51 per ounce (up 0.1 per cent). The closest dated WTI oil future was trading at US$65.04 (up 0.2 per cent). Brent also increased by 0.2 per cent to US$68.40. The US biggest fuel pipeline had suffered a cyberattack. Colonial Pipeline said on Monday it was using a phased approach to restore the pipeline.
Cryptocurrencies were a mixed bag, with Bitcoin decreasing 0.7 per cent and Ethereum rising 6.8 per cent.
The US 10-year treasury rate stayed flat, yielding 1.591 per cent.
Australian Markets:
The ASX200 had a strong day yesterday, rising 1.3 per cent. Ten of 11 sectors closed higher. This rise was led by Materials, up 3.4 per cent, and Industrials, up 1.4 per cent.
The Materials sector gained 8.5 per cent in the past five days, driven by strong commodity prices.
On the flip side, the only sector to decline was Utilities, down 0.1 per cent.
Lithium company Pilbara Minerals was the best performer of the ASX200 yesterday, rising 10.6 per cent. This strong performance followed the release of a Pilbara Minerals report detailing "exceptional initial drilling results adjacent to former Alrua Tenement boundary".
Another outperformer was legal services provider Omni Bridgeway, which rose 9.0 per cent. This came following the news that they will receive AUS$94 million as partial proceeds from a court case for FY21, the Wivenhoe Dam class action.
The a2 Milk Company was the worst performer of the ASX200 yesterday following the fourth downgrade of guidance, falling 13.1 per cent.
Incitec Pivot fell 8.9 per cent. The fertiliser manufacturer and miner released an update on their Waggaman Ammonia Plant, which has required close downs previously. The announcement outlined the restarting of the plant mid-April and the subsequent technical issues which have required further repairs. The two sets of repairs were forecast to cost A$26-$33 million of net profit. This disappointed investors, who responded unfavourably to the announcement.
Unexplained community transmission in New South Wales has prompted the extension of Covid restrictions in the state. Tourism providers in Australia are asking for more concrete details around when the wider opening of borders will occur internationally.
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Disclaimer: This Morning Brief has been prepared in good faith and reflects opinions and views 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. This Morning 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 broker disclosure statement is available free of charge at www.jarden.co.nz. Jarden is not a registered bank in New Zealand. Full disclaimer available at: https://www.jarden.co.nz/limitations-and-disclaimera>