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New Zealand
The S&P NZ50 was up just over 0.4 per cent on the day. Small-cap stocks continued to outperform with the S&P NZ Small cap index rising 1.5 per cent.
Financials and Healthcare were the best sectors on the day, up 2.9 and 1.3 per cent respectively. Real Estate and Energy were the worst-performing sectors, down 1.5 and 0.6 per cent respectively.
Airline operator Air New Zealand was the best performing stock on the day, up 5.4 per cent, following positive investor sentiment around vaccine news and smaller international lockdowns. Fisher and Paykel Healthcare followed up strongly, rising 3.5 per cent.
Retirement village operator Arvida Group was the worst performer on the day, down 3.9 per cent. Property investment company Kiwi Property Group was the next worst performer on the day, down 3.5 per cent.
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The Arvida financial report features unaudited net profit of $41.8 million. This figure included a $37.7 million fair value movement on investment properties. The performance of the underlying business is better indicated by an 8 per cent rise in revenue for the period. Underlying profit was $20.5 million, down 12.3 per cent on the same period last year.
Additional costs were incurred in ensuring the community remained Covid-19 free and this goes towards explaining the period's underperformance. Looking forward, Arvida has a development pipeline of 1547 beds and aims to construct 200 new units each year.
Vital Healthcare Property Trust, down 0.2 per cent, announced that it would be acquiring Grace Hospital. Grace Hospital is Tauranga's only private in-patient hospital and features 51 beds and 11 theatres.
The property will be leased to a joint venture between Southern Cross Hospitals and Evolution Healthcare for 30 years and will provide a 5.25 per cent yield. The company has said that the 4-hectare site on which the Hospital sits will provide significant future expansion opportunities.
The Finance Minister Grant Robertson has written to the Reserve Bank to suggest a change to its guiding policies on monetary policy to enable a softening of the surging house prices.
While the Bank is required to avoid unnecessary instability in interest rates and exchange rates, it is not required to avoid the same for house prices. Robertson, whilst making clear he was not challenging the Reserve Bank independence, seeks to rectify that.
It is unclear how much the additional consideration would change the way that the Reserve Bank makes policy. It may be the case that house prices will continue to rise until the government introduces effective policy to increase the rate at which new houses are built.
International
US Markets:
At time of writing, the SPX500 was up 1.6 per cent, the Dow Jones Industrial was up 1.7 per cent and the Nasdaq was also up 1.0 per cent.
The Dow Jones Industrial Average crossed 30000 for the first time overnight, reaching record highs. Despite this, Small stocks outperformed on the day as the SPX Midcap 400 rose 1.8 per cent.
Energy was the best performing sector once again, up 4.0 per cent, followed by Financials, up 3.4 per cent. No sectors were in the red and Healthcare was the relative worst performer, only increasing 0.6 per cent.
Oil company Apache Corp was the best performer on the day, up 10.3 per cent. The gain was driven by price increases in the underlying commodity as WTI Oil climbed above prices last seen in March.
Cruise-line operator Carnival Corp was the next best performer on the day, also up 10.3 per cent. The company continues its recent excellent run of form, buoyed by reopening optimism and a recently announced conversion of US$90.8 million worth of convertible notes to equity through the offer of 10.4 million shares.
Laboratory equipment distributor Bio Rad Laboratories was the worst performer on the day, down 7.8 per cent. The loss came amid news that State Street Corp had increased its holding in the company by 3.4 per cent.
Asian markets:
At time of writing, the Shanghai Index was down 0.3 per cent and the Shenzhen index was also down 0.3 per cent. The Nikkei 225 was up 2.5 per cent.
Chinese Communist Party Premier Li Keqiang has predicted that China will return to a "proper" range of economic development by next year.
China's economy will be the only one to post positive growth figures this year, after a brief slump in the aftermath of Covid-19. The Premier reiterated China's trade policy of gradually re-opening to foreign investment and allowing consumption to play a leading role in creating growth.
Commodities:
At time of writing, Gold was down a further 1.8 per cent, trading at US$1802.7 per ounce. WTI Crude was up 4.3 per cent, trading at US$44.7 per barrel. The ten-year treasury yield was up to 0.88 per cent.
Australia
The ASX 200 extended gains for yet another day, rising 1.3 per cent off optimism from the Oxford-AstraZeneca vaccine trial results. Evident beneficiaries were companies which would recover strongly from the reopening of borders, such as Flight Centre (+3 per cent), Webjet (+4.7 per cent) and Qantas (+3.9 per cent).
Big banks led both the benchmark and large cap indices higher, with ANZ up 3.1 per cent, NAB and Westpac both up 2.6 per cent a piece and Commonwealth Bank climbing 2 per cent.
However, the Energy sector was the best performer overall - rising 3.4 per cent off the back of continued gains from Beach Energy (+8.2 per cent), Whitehaven Coal (+6.9 per cent), Origin (+5.2 per cent) and others.
The country's second-largest independent oil and gas producer Santos (+3.9 per cent) was also buoyed by news that the Australian government approved its A$3.6 billion project in Narrabri, which includes plans for 850 oil wells to be drilled across the basin to produce around 1,500 petajoules of gas.
Iron ore miners continued yesterday's rally with continued strong demand from Chinese steel mills, BHP Group (+3.4 per cent), Rio Tinto (+2.2 per cent) and Fortescue (+2.7 per cent) rose for a second consecutive day.
All was not positive however, with gold exposed mining stocks feeling the selling pressure after the gold price dropped 2 per cent overnight. Newcrest Mining dropped 6.1 per cent, Northern Star Resources fell 8.9 per cent and Saracen Mineral Holdings declined 9 per cent.
Coming up
New Zealand
New Zealand will have a busy day on the AGM front, with investors likely watching for any forward guidance. Fletcher Building, Kathmandu, Synlait Milk, Delegat, Fisher and Paykel Healthcare, Turners and Tower will all host shareholders today.
International
The US will release Initial and Continuing jobless claims, along with 3Q GDP, Fed Minutes, Core Inflation and New Homes Sales.
Australia
Busy day of AGMs in Australia today with Beach Energy, Harvey Norman, IOOF, Northern Star, Pro Medicus and Regis Resources all hosting shareholders.
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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