Jarden Brief: Tesla shares drop on Elon Musk comments

The market did not respond well to comments from Elon Musk. Photo / Getty Images

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

New Zealand

New Zealand equities fell for the third day out of four this week, with the S&P/NZX 50 finishing down 1.1 per cent at 12,050.3 points by Thursday's close.

Markets were influenced by the release of official consumer price inflation (CPI) data for the fourth quarter of 2021. Consumer prices rose 1.4 per cent in the quarter, giving an annual figure of 5.9 per cent, which was stronger than the market consensus and the RBNZ forecast of 5.7 per cent. The annual figure is the highest it has been in 31 years, showing a significant squeeze on the cost of living in New Zealand, with economists expecting future rate hikes through 2022. Main contributors were housing construction, rental, and transportation costs, as 2021 saw surging house prices and supply chain disruptions across the country.

Payment services provider Pushpay Holdings slipped 3.5 per cent as technology companies, more heavily weighted to future cashflows, have valuations that tend to be hindered by higher inflation and potentially higher interest rates. Other notable losses for the day included construction company Fletcher Building (-3.0 per cent) and retirement village operator Ryman Healthcare (-3.0 per cent)

More news included Restaurant Brands posting a solid fourth quarter trading update, with total store sales up 5.5 per cent year on year to $284 million. Sales for the year ended 31 December 2021 totalled $1,068.2 million, 19.7 per cent greater than the previous comparable year. The company finished the day up 0.3 per cent at $14.60.

Technology companies Serko and EROAD, along with property company Investore, were Thursday's top performing stocks with gains of 2.7, 1.9 and 2.3 per cent, respectively.

International                                                                                         
US

The US major indices continued their upward move, which could be linked to better than expected results for the fourth quarter GDP. The annualised rate for the quarter came in at 6.9 per cent, well above the estimated 5.5 per cent. The main drivers of growth were consumer activity and business spending, resulting in the strongest full year growth in almost 40 years.

At the time of writing, the S&P 500 rose 0.8 per cent, the Dow Jones Industrial Average traded 1.0 per cent higher, and the NASDAQ was up 0.3 per cent.

Three sectors were in the red, namely consumer discretionary (-0.7 per cent), real estate (-0.4 per cent), and industrials (-0.1 per cent). All other sectors were performing well, with communication services (+1.5 per cent), and consumer staples (+1.4 per cent) booking the biggest gains.

The best single stock performer of the S&P 500 this morning was Seagate Technology, rallying 11.5 per cent. The electronic data storage technology provider reported its second quarter 2022 earnings on Wednesday and released an upbeat forecast and raised its long-term profit margin target.

Packaging Corp of America also performed well, rising 10.8 per cent. The container product producer reported better-than-expected fourth quarter 2021 earnings results on Wednesday, with quarterly earnings coming in at US$216.5 million versus consensus expectations of US$195.9 million.

Rounding out the leader board was digital workflow company Service Now, up 10.2 per cent. The firm's quarter four 2021 revenue, reported on Wednesday, grew 29 per cent. Its adjusted earnings per share for the quarter came in at US$1.46, up 24.8 per cent year-on-year.

Leading the index down was Teradyne, dropping 26.7 per cent. The supplier of automation equipment for test and industrial applications hit a new 52-week low despite reporting positive fourth quarter 2021 results. However, the company gave first quarter 2022 guidance, which came in below market expectations.

Tesla shares lost 8.4 per cent in value after the company's CEO Elon Musk said that it would be more important to make a robot than new car models this year on the fourth quarter 2021 earnings call on Wednesday.

Lam Research, a supplier of services to the semiconductor industry, also underperformed, trading 7.2 per cent lower. The company missed revenue estimates in its quarterly earnings result and added a weaker-than-expected forecast for the next quarter.

Rest of the World

Contrary to US markets, all major Asian indices were cutting their losses overnight. The Shanghai Composite decreased 1.8 per cent, the Nikkei dropped 3.1 per cent, the Hang Seng closed 2.0 per cent lower, and the Shenzhen was down 2.8 per cent.

Commodities

Gold continued its move in contrast to equities, declining 2.0 per cent to US$1,793.50 per ounce.

Oil traded slightly lower this morning, down 0.1 per cent to US$87.28 per barrel.
Cryptocurrencies were in the red across the board, with Bitcoin declining 2.1 per cent and Ethereum down 2.1 per cent.

The US 10-year treasury rate was yielding 1.798 per cent, at the time of writing.

Australia

The ASX 200 fell 1.8 per cent yesterday to its third 100-day low in a week. All 11 sectors have declined over the past week.

Leading the index downwards were gold miners Evolution Mining and Silver Lake Resources, falling on the releases of quarterly activities reports, declining 11.3 and 11.0 per cent, respectively.

Evolution Mining released its December quarter report with gold production of 148,084 ounces and an improved All-In Sustaining Cost (AISC) of A$1,381 per ounce. Operating headwinds were highlighted, with periods where up to 15 per cent of the workforce has been unable to work, with Covid-19 cases or close contacts at some sites. Rainfall also presented a challenge.

Silver Lake Resources had quarterly production of 64,009 ounces of gold mined at an AISC of A$1,332 per ounce. It outlined that it's well-positioned to deliver on the financial year 2022 guidance of 235,000-255,000 ounces.

In contrast, the top performing stocks were Beach Energy and Platinum Asset Management, each rising 8.8 and 4.6 per cent. Oil and gas company Beach Energy delivered its quarterly report earlier in the week.

Australia Covid-19 cases numbered over 40,000 yesterday. While high, case numbers appear to be coming down off recent peaks. Worker shortages due to positive cases and close contacts appear to be a common theme in main centres.

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