Keeping you up to date with the latest market moves, in association with Investment firm Jarden
New Zealand
The S&P NZ50 finished the day up 0.3 per cent.
The best performing sector on the day was consumer staples, which increased by 2.0 per cent. The next best performing sector was real estate, which rose 1.2 per cent. The worst performing sector on the day was utilities, down 1.4 per cent, followed by information technology, falling 0.7 per cent.
The best performing company on the day was corporate travel company Serko, which jumped 3.4 percent, with outdoor wear retailer Kathmandu Holdings (+3.1 per cent), not far behind. The move is unsurprising, considering the recent rotation into retail exposed stocks. Investors may be anticipating that, similarly to other retailers who have reported positive updates, Kathmandu has also benefitted from a release of consumer savings accumulated in response to Covid-19.
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The worst performing companies on the day were gentailer Mercury Energy, which fell 5.1 percent, along with Contact Energy, which dropped 3.2 percent. Both companies have experienced recent highs, driven by ETF purchasing which has since abated – with some analysts unsurprised that prices are experiencing a reversion.
Vehicle financing and insurance company Turners Automotive, up 4.7 per cent, released a positive update concerning their financial year 2021 earnings guidance. The company, which previously expected net profit before tax to be between $28 - $31 million, now expects the figure to be between $33 - $35 million. The upgrade has been driven by better-than-expected performance across the Auto Retail, Finance and Insurance business units in November and December.
Meanwhile, the latest Global Dairy Auction saw milk prices improve by 4.8 per cent – building on a strong milk price performance throughout 2020. Skim milk drove the index higher, with prices increasing by 7.0 per cent while whole milk prices rose 2.2 per cent
International
US Markets:
At time of writing, the US markets were up following a bleak prior week, with all three major indices up. The S&P 500 recovered 0.8 per cent, the Dow Jones by 0.5 per cent and the Nasdaq index rose 1.2 per cent.
Outperforming stocks included household names General Motors (+9.1 per cent), Facebook (+2.0 per cent) and Alphabet (+2.0 per cent).
The market seemed to shrug off news of a new mutation of Covid-19 discovered in Germany, with 35 patients in Bavaria being infected with the new strain. Testing is still underway, with the mutation's infectivity and lethality still at question.
Market gains seemed to be fuelled by optimism of a democratic government ready to 'act big' on stimulus after a speech from former treasury secretary nominee and former chair of the Federal Reserve, Janet Yellen.
Yellen also highlighted the risk of climate change, and pushed for investment into clean technology, renewable technology and electric vehicles – causing the Global Clean Energy ETF to rise by 1.8 per cent.
Asian markets:
Overnight the Shanghai index fell 0.8 per cent, although the Hangseng and Nikkei both did well - up by 2.7 and 1.4 per cent, respectively.
Media have reported a sell-off in Alibaba stock by wealthy investors, the latest consequence of China's investigation into the company and the sudden disappearance of its high profile CEO Jack Ma. The sell-off makes sense given the declining price of Alibaba's stock in the last few months, with its Hangseng listing falling more than 20 per cent since October last year.
Commodities:
At time of writing, Gold was up a further 0.3 per cent, trading at US$1842.02 per ounce. WTI Crude was up 1.1 per cent, trading at US$52.92 per barrel.
Australia:
The S&P ASX200 finished the day up 1.2 per cent, while the Small Cap Index fared better - up 1.6 per cent as smaller companies outperformed larger ones on the day.
The best performing sector on the day was Consumer Discretionaries, rising 1.9 per cent with Information Technology also up by 1.5 per cent. The worst performing sector on the day was Utilities, which fell 0.1 per cent - the only sector down on the day.
The market star yesterday was waste management company Bingo Industries, which advanced 20.1 per cent after it confirmed private equity interest in the company and receiving a conditional $3.50-per-share buyout offer. The stock closed at AU$3.30, leaving an approximate 6% upside for investors willing to bet on the deal going through. Larger cap stocks also had some room to move, with Domino's Pizza up 7.8 per cent, and chemicals company Nufarm up 7.4 per cent.
Engineering services company Worley was the worst performer of the day - down 2.8 per cent, followed by information technology company Megaport, down 1.9 per cent.
While traditional measures of inflation are not showing large moves in the short term, inflation expectations have certainly rebounded from March lows. Rising commodity prices, large amounts of fiscal stimulus and decreasing globalisation, a deflationary trend, are causing investor to take notice. This interest can be seen in a bond market feature known as a 10-year breakeven – which measures the difference between nominal and inflation-adjusted bond yields. The Australian breakeven is at 1.8 per cent, while the US breakeven is at 2.1 per cent, their highest levels since late 2018.
• 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-disclaimer
