US employers say they are struggling to find staff. Photo / Getty Images
Keeping you up to date with the latest market moves, in association with Investment firm Jarden
New Zealand
New Zealand equities traded stronger on Thursday's close with the NZX50 finishing the day at 12,437.2 points, up 1.3 per cent.
Markets reacted to yesterday's release of Budget 2021, which included a significant increase in social spending and the continuation of post Covid-19 recovery measures.
Highlights included a jump in individual benefit payments, continuation of the school lunches and healthy homes programmes, $1.5bn towards the vaccination rollout as well as an uplift in spending distributed to the various district health boards. Overall, the government has committed to an even greater spend to be utilised on a range of initiatives, citing a better-than-expected economy as a means to help fund this increased spending.
Outperforming sectors included Consumer Non-Cyclicals and Financials which recorded gains of 3.0 and 2.1 per cent, respectively.
Sector movements were buoyed by performances from dairy processor Synlait Milk and electricity retailor Mercury. Synlait jumped 6.3 per cent, which offset some of Wednesday's losses following the resignation of CFO Angela Dixon earlier in the week.
Mercury also rebounded from Wednesday's 4.3 per cent loss, finishing up 4.2 per cent yesterday.
In contrast, downward pressure on the index was drawn from sector underperformance from energy (down 3.6 per cent) and consumer cyclicals (down 0.5 per cent) – although the former's loss was largely due to Z Energy going ex-dividend.
Lastly, Argosy Property Limited rounded off the single stock losers with a 2.0 per cent fall as the stock remains volatile following its earnings release on Wednesday.
INTERNATIONAL
US
The big selloff from the last few days seems to have alleviated, with all three main US indices trading back in the green. The S&P500 rose 1.1 per cent, the NASDAQ was up 1.6 per cent and the DJIA increased by 0.7 per cent.
Information Technology and Communication Services booked the biggest gains, up 1.9 and 1.6 per cent, respectively. Energy was the only sector that underperformed, down 0.6 per cent.
The top performing stock at the time of writing was semiconductor producer Enphase Energy (+8.2 per cent), which retained its positive momentum over the last few days. Next in line were meat and food product producer Hormel Foods Corp, up 8.1 per cent, after a strong second quarter 2021 results release, and analog circuit producer Maxim Integrated, rising 4.7 per cent to a new 52-week high.
Luxury fashion producer Ralph Lauren decreased by 7.7 per cent despite an optically strong fourth quarter 2021 earnings announcement. Apparel retailer Gap also fell, down 4.2 per cent.
L Brands, which is the parent company of Victoria's Secret and Bath & Body Works, reported its first-quarter earnings. Net income rose to US$276.6 million, compared to a loss of US$296.9 million last year. Total sales increased by more than 80 per cent. Later this year, L Brands is planning to spin-off its Victoria's Secret business into its own publicly traded entity.
Squarespace (+10.5 per cent), which sells tools for easy website creation and publishing, went public through a direct listing with a market value of US$6.6 billion on Wednesday.
The shares opened at US$48, below its US$50 reference price on the NYSE, reflecting the current underperformance of cloud software stocks in the market. The biggest shareholders of the firm are founder and CEO Anthony Casalena, with a US$2.4 billion stake, while venture capital firms Index Ventures and Accel Partners hold US$944 million and US$750 million, respectively. Squarespace's revenue last year rose 28 per cent to US$621.1 million.
The US Labor Department reported initial jobless claims falling to 444,000 last week, the lowest level since March last year. More states are announcing an early end to unemployment benefits, which were introduced as part of the US$1.9 billion American Rescue Plan in March 2021. Many employers are claiming that they are struggling to hire enough people for open positions and some argue this is due to people being comfortable enough with the amount they are receiving from unemployment benefits.
Asia
The big Asian indices were a mixed bag this morning. The Shanghai index was down 0.1 per cent, the Nikkei rose 0.2 per cent, and the Hang Seng index decreased 0.5 per cent.
ByteDance Ltd founder Zhang Yiming announced yesterday that he will step down as CEO. The world's most valuable start-up is the owner of TikTok and is preparing an IPO in the US or Hong Kong. Additionally, the firm is planning to expand into e-commerce, becoming a direct competitor to Alibaba (+1.8 per cent) and Meituan (+5.1 per cent).
Commodities
Gold moved inverse to the equity markets and decreased by 0.3 per cent to US$1,876.20 per ounce. Silver also underperformed, decreasing 0.6 per cent to US$27.86.
Oil fell 2.2 per cent to US$61.98.
The 10-year treasury rate retreated slightly, yielding 1.635 per cent at the time of writing.
Cryptocurrencies started moving out of their slump, trading in the green across the board. Bitcoin increased by 2.1 per cent and Ethereum was up 6.5 per cent.
The Fed announced yesterday that it will release a research paper in the middle of the year, which is said to explore the idea of developing its own digital currency.
Australia
The ASX200 rose by 1.3 per cent yesterday with 10 out of 11 sectors in the green. The top performing sector was Information Technology, which began to recover following a rout from the sector which has been seen throughout the month. Afterpay was the top performer of the day, rising 7.7 per cent. Altium was another outperformer, up 6.6 per cent.
Meanwhile, Appen's share price rose again yesterday, following a 17.4 per cent surge the previous day. The investor day yesterday had the company discussing its restructuring plans and business model positioning for future growth. While this was largely not new information from the previous day, the reinforcement had share price up 4.9 per cent.
Analytics software company Nuix continued its volatile week yesterday, down 6.8 per cent. This came following claims by three Fairfax publications that Blackall, an entity controlled by a former Nuix board member, owned options which were created in 2011 and backdated to 2005. These options were cashed out for AUS$80 million at the IPO last year. Nuix is yet to respond to the allegations. Earlier in the week, company executives accepted responsibility for the distrust in the company related to media reports of questionable governance and accounting prior to its listing.
The only sector to decline was Materials, down 0.4 per cent.
Iluka Resources fell 4.4 per cent. This came following an announcement that the Sierre Rutile mining operation in Sierra Leone has had a series of business challenges and as a result production will be paused later this year for six months.
In macro-economic news, Australia's unemployment rate reduced to 5.5 per cent in April, down from 5.7 per cent in March.
Coming up Today:
A busy day is expected ahead, with My Food Bag, Oceania Healthcare, Ryman Healthcare and Metro Performance Glass all set to release their full-year result this morning. Meanwhile, the NZX's longest listed company Sanford will be reporting its first-half earnings.
A large number of data releases are further expected in the evening, including Markit PMI's for the Eurozone, Australia and US.
• 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>