Jarden Brief: Oil price nears three-year high

Oil prices have risen sharply in recent weeks. Photo / AP

Keeping you up to date with the latest market moves, in association with Investment firm Jarden

New Zealand:

The NZX 50 declined again, down a slim 0.2 per cent yesterday.

Consumer non-cyclicals and financials fell 1.6 and 1.1 per cent, respectively.
On the flipside, utilities rose 0.7 per cent, driven by top performer Mercury NZ (rising 3.1 per cent), and healthcare recovered 0.7 per cent.

Oceania Healthcare was another outperformer, rising 2.1 per cent and pushing the healthcare sector upwards. The residential aged care and retirement village operator's share price has experienced a broad decline since the beginning of September.
Property investor Argosy Property rose 1.3 per cent. Sanford fell 3.7 per cent, and Mainfreight fell 2.5 per cent.

The Crown accounts were yesterday released by Treasury for the year to June 2021. The operating balance was a $4.6 billion deficit, 1.3 per cent of New Zealand gross domestic product. These accounts exclude the period since the recent Covid-19 outbreak.

The ANZ NZ Truckometer survey was released yesterday, measuring traffic flows as an indicator of economic activity. The light traffic index rose 6.4 per cent and heavy traffic increased by 13.4 per cent in September. While easing restrictions have increased both indexes, they remain well below levels experienced prior to the current Covid-19 outbreak.

International Markets:
US:

US Markets are trading flat this morning as the S&P 500, Nasdaq, and the Dow Jones Industrial Average remain mostly unchanged at the time of writing.

Leading sectors comprise of both real estate and consumer discretionary, each making gains of 1.5 and 0.8 per cent.

Hotel and casino operator MGM Grand Resorts International led the way with a strong performance so far this morning, up 8.3 per cent at the time of writing after receiving a series of significant upgrades from research brokers before the market opened.

Homeware energy solutions company Enphase Energy doubled down on yesterday's winnings (+6 per cent), currently pushing higher by 5.4 per cent. Enphase installs solar panel and other energy-related technology. Also, it was today announced an Australian retirement village operator, South West Rocks, had selected Enphase for the installation of its 1.2MW private solar grid network.

On the flipside, communication (down 1.2 per cent) and energy (down 0.3 per cent) were the laggard sectors at the time of writing.

Weighing down index performance so far are technology hard drive and storage companies Micron Technology (down 4.8 per cent) and Seagate Technology (down 3.9 per cent). Both have benefitted from a shortage in semiconductor inventories, with a market report this morning claiming the price of memory DRAM products will fall in 2022 as market conditions reverse from shortage to surplus.

Rest of the World Markets:

Asian indices were all down overnight as the Hang Seng, Nikkei, and Shanghai composite fell 1.4, 0.9 and 1.3 per cent, respectively.

Interestingly, despite being a subsidiary of the heavily indebted property giant Evergrande, Evergrande New Energy Auto, an electric car making company, jumped 4.5 per cent overnight as it committed to the production of electric cars by 2022.

Commodities:

Among commonly tracked commodities. Gold rose by 0.3 per cent, on the back of fresh inflation concerns, to US$1,761.0. US 10-year treasury yields did however remain roughly unchanged at 1.59 per cent. WTI Crude oil continued its momentum, trading higher by 0.2 per cent to US$80.6 per barrel, close to a three-year high as the energy crunch increases reliance on fossil fuels to meet electricity demand.

Cryptocurrencies took a dive with Bitcoin down 3.3 per cent to US$55,702.7 while Ethereum was down 1.4 per cent to US$3,495.0.

Australian Markets:

The ASX 200 continued to decline in Tuesday's session, closing 0.3 per cent lower.
Most sectors were underperforming, while healthcare (+0.9 per cent) and consumer staples (+0.2 per cent) were the only two sectors finishing in the green. Information technology (-1.5 per cent) and energy (-1.1 per cent) were the biggest laggards of the day.

Global metal and electronics recycling firm Sims was the top gainer of the ASX 200 yesterday, increasing 4.6 per cent. Next in line was mining company Perseus Mining, up 4.3 per cent, after announcing the dates for its investor calls for its 2021 financial year sustainability report (on 18 October 2021) and its September quarterly report (on 21 October 2021). Bauxite miner Alumina also performed well, rising 4.2 per cent.

On the flipside, personal protective equipment manufacturer Ansell was dragging the market lower, decreasing 4.6 per cent. Machine intelligence company Appen declined by 3.9 per cent. Despite the news of Australia being likely to open international travel before the end of the year, travel management services provider Corporate Travel Management closed 3.5 per cent lower.

According to National Australia Bank's latest report, business confidence in Australia jumped to 13 points in September, compared to the six-point decrease in August. This improvement reflects the hopes of businesses that the easing of Covid-19 restrictions will have a positive impact on the economy. The conditions index - measuring hiring, sales and profits - declined to 5 points in September, compared to 14 points in the previous survey.

Later today, Westpac will release its latest Consumer Confidence report.

• For more information on the latest market moves, get in touch with Jarden.

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>