Prime Minister Jacinda Ardern is facing growing criticism from the business community. Photo / Mark Mitchell
Keeping you up to date with the latest market moves, in association with Investment firm Jarden
New Zealand
New Zealand equities traded in the red at yesterday's close, with the S&P/NZX 50 finishing the day at 12,281.5 points, a 1.2 per cent fall.
In the headlines were infrastructure company, Infratil Ltd, property manager, Argosy Property Ltd, and travel software provider, Serko Ltd, as all three reported full-year earnings yesterday.
Infratil met expectations, with operating earnings of $399 million falling within the previously guided range of $395 to 415 million. One major downside however, came from underperformance from its Longroad Energy assets, which were negatively affected by the recent Texas power event. Infratil finished the day sliding 0.1 per cent, now priced at $7.30.
After advancing close to 5 per cent on Tuesday ahead of its result, Argosy fell 2.6 per cent despite mainly positive commentary surrounding its earnings release.
Lastly, Serko announced that it continues to face covid headwinds with total bookings falling 63 per cent from last year. The company closed down 6.7 per cent, the day's worst performer.
Almost all sectors were in the red yesterday, although Energy closed flat, with Z Energy holding the sector constant ahead of its 14 cent dividend tomorrow.
Going against the trend, rental vehicle company, Tourism Holdings Ltd (THL), advanced 0.8 per cent. Joining THL was horticulture and pet food producer, Scales, moving up a modest 0.7 per cent.
Downward pressure on the index was drawn from sector losses in industrials (down 1.8 per cent) and Financials (down 1.4 per cent). Mercury NZ followed Serko as the second worst performing stock, down 4.3 per cent.
In other news, recently released survey data from an accounting firm has shed light on business attitudes towards current policy designed to support a post Covid-19 recovery. Among 477 companies, more than 50 per cent believed their operating environment would deteriorate in the near term – up from a milder 40 per cent prior to last year's general election. Furthermore, 71 per cent were unhappy with the current Ardern administration - believing it was not doing enough to support businesses. Many companies pointed towards minimum wage increases and tax changes as the main factors for the change in perception.
INTERNATIONAL
US
Reinforced by inflationary fears after the Fed hinted it may reconsider easing policies if the economy continues to improve, all three major US indices were trading in the red. The S&P500 fell 1.1 per cent, the NASDAQ was down 0.9 per cent and the DJIA decreased by 1.2 per cent.
All sectors were underperforming, with Energy (-3.0 per cent) and Materials (-1.9 per cent) booking the biggest losses.
The top gainers at the time of writing were entertainment developer and publisher, Take-Two Interactive Software Inc (+5.8 per cent), after it reported positive fourth quarter 2021 performance on Tuesday. Retail giant, Target Corp (+5.4 per cent), also reported strong results, leading the stock to a new 52-week high. Rounding out the top performers was semiconductor developer, Enphase Energy, up 5.0 per cent.
The biggest losses of the day were made by mining company, FCX (-6.5 per cent), apparel and home fashions retailer, TJX Companies (-5.9 per cent), after its pre-market open earnings announcement, and oilfield equipment manufacturer, Nov Inc (-5.2 per cent).
Ford (-0.6 per cent) has announced that due to the global shortage of semiconductor chips, it will halt or cut production at eight North American plants for varying periods of time through June. The car manufacturer expects the impact of the chip shortage to reduce its earnings by about US$2.5 billion in 2021.
Asia
The popular Asian indices were a mixed bag at time of writing. The Shanghai index was down 0.5 per cent, the Nikkei 225 was down 1.3 per cent, and the Hang Seng index was up 1.4 per cent.
Commodities
Gold is trading at its highest value since January, increasing 0.2 per cent to US$1,872.60 per ounce. Meanwhile, Silver fell 1.8 per cent to US$27.83 per ounce.
Oil fell 3.1 per cent to US$63.52.
The US 10-year treasury yield increased slightly, to 1.688 per cent.
Cryptocurrencies were facing major selloffs across the board after Chinese officials warned businesses to avoid involvement with digital currencies (excluding its own). Bitcoin dropped to near US$33,000 at one point in Wednesday's session, before recovering to around $38,000. At time of writing, Bitcoin was down 10.3 per cent, while Ethereum plummeted 20.1 per cent.
Australia
The S&P ASX 200 fell 1.9 per cent yesterday, with only 21 companies up or flat on the day.
Transaction services company, EML Payments, was the worst performing single company on the day, plunging 45.6 per cent. The company announced that one of its Irish units could face operational curbs after the country's central bank raised regulatory concerns. It was not able to quantify the expected impact to full year earnings.
The index was led down by the Basic Materials sector, down 3.2 per cent. The 10 worst performing companies were littered with resource and mining stocks. Gold miner, St Barbara, was the second worst performer on the day, down 7.0 per cent, continuing its downward trend from yesterday. Mining services company, Perenti Global, also continues to trade poorly, down 6.3 per cent.
The Materials sector was previously the beneficiary of the reopening growth trade and saw demand as an inflation hedge. However, the market appears to be waking up to the possibility that lockdown driven labour shortages may be afflicting the sector more broadly after both St Barbara and Perenti flagged potential issues.
No sectors were up on the day although Consumer Non-Cyclicals and Healthcare fared the best, down 0.7 and 1.0 per cent respectively.
Machine learning service provider, Appen, was the best performing company on the day, up 17.4 per cent on announcing restructuring plans. The company aims to provide a broader range of AI data annotation products and look for growth in new markets. To achieve this, the company will operate under four business units – global, enterprise, China and government. Appen remains down 46.5 per cent year to date.
Coming up Today:
There is a quiet day ahead for planned market announcements, although headlines are likely to be taken up by the NZ Government's budget reveal later today.
Sydney Airport will also be releasing its April revenue numbers, while Briscoes will be hosting its AGM.
ASX-listed machine learning company, Appen, will be hosting its investor day later today, which will be an interesting one to watch given the stock's 17.4 per cent surge yesterday.
• 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>