Keeping you up to date with the latest market moves, in association with Investment firm Jarden
Coming up today:
Expect retail sales figures from the US and Manufacturing PMI numbers from New Zealand.
New Zealand equities were in the red yesterday with the S&P/NZX 50 closing to 12,428.1 points, down 1.1 per cent.
Sector gains were slim, with Consumer Cyclicals and Healthcare each leading the way, up 0.4 and 0.1 per cent respectively.
These sector gains were well supported by the single stock winner NZX Ltd, as the company representing New Zealand's largest exchange traded up 1.5 per cent. Furthermore, building and supply company Fletcher Building Ltd also advanced a handsome 1.1 per cent.
In contrast, downward pressure on indices was drawn from sector losses of Consumer Non-Cyclical (down 2.1 per cent) and Industrials (down 2.0 per cent).
Rounding out as the single stock loser was software company Vista Group Ltd which slumped to a 5.2 per cent loss to finish at $2.32. Yesterday's loss did little to offset Vista's impressive run over the last two months which has seen the stock jump over 40 per cent from as low as $1.45 in February.
Similarly, generator retailer Mercury Energy receded 4.3 per cent to close at $6.46.
More housing data was released today with the monthly REINZ survey giving results for the month of April. New Zealand house prices rose 1.7 per cent compared to last month, while overall house sales fell 12.8 per cent. Commentators believe this potentially indicates some form of cooling in the housing market in response to various policies put in place by the New Zealand Government at the end of March.
Kiwi Property Group (down 0.4 per cent) has announced that Sylvia Park will host New Zealand's first Culture Kings streetwear store. The retailer will provide New Zealand consumers with access to 100 exclusive street, sport, and fashion brands.
The big US sell-off in response to inflationary fears did not last long, as all major US indices were back in the green this morning. At the time of writing, the S&P500 rose 1.0 per cent, The NASDAQ was up 0.3 per cent and the DJIA recovered by 1.1 per cent.
The market improvements were supported by the Labour Department's report, showing initial jobless claims fell more than expected last week. Additionally, the Centre for Disease Control (CDC) has supported the FDA's approval to vaccinate children aged 12 and older, and the CDC is expected to update their public health guidance later today, that fully vaccinated people will no longer have to wear face coverings or stay away six feet from others in most settings. The Government is trying to incentivise people to get vaccinated by entering a partnership with ride-share providers Uber (+0.4 per cent) and Lyft (-2.1 per cent) to offer free rides to vaccination sites until 4 July 2021.
The best performing sectors on the day were Utilities (+1.9 per cent) and Financials (+1.8 per cent).
Energy (-1.6 per cent) lagged the index.
The best performing equities on the day included semiconductor processing equipment manufacturer Lam Research Corp, electronics manufacturer Applied Materials Inc, and steel manufacturer Nucor Corp, respectively up 5.0, 4.7, and 4.5 per cent.
The market lagging stocks included oil and gas explorer and producer Occidental Petroleum Corp (-6.0 per cent), oil and natural gas explorer and producer Diamondback Energy Inc (-5.0 per cent), and oil and gas explorer and producer Marathon Oil Corp (-4.7 per cent).
The Colonial Pipeline has restored operations after Monday's cyber-attack. Colonial has said that it will take a few days for the product delivery supply chain to return to normal.
The popular Asian indices were down at time of writing. The Shangahai index (China) was down 1.0 per cent; the Shenzhen index (China) was down 1.1 per cent; the Nikkei (Japan) was down 2.5 per cent; and the Hang Seng (Hong Kong) index was down 1.8 per cent.
E-commerce giant Alibaba (-3.2 per cent) reported a net loss of 5.47 billion yuan for the March quarter, which is the first operating loss for the company since going public. The market expected a net profit of 6.95 billion yuan, however, due to the US$2.8 billion antitrust fine received earlier this year. The company was still beating revenue expectations, which increased 64 per cent year-over-year to US$28.6 billion.
Gold was trading at US$1,824.90 per ounce (+0.1 per cent); while Silver was trading at US$27.12 per ounce (-0.5 per cent).
Oil decreased by 3.5 per cent to US$63.76 and Brent fell 3.4 per cent to US$66.91.
Cryptocurrencies were all underperforming, with Bitcoin falling 11.0 per cent and Ethereum dropping 10.0 per cent.
This sell-off occurred after Elon Musk explained his sudden rejection of cryptocurrency as payment for Tesla's (-2.4 per cent) cars. He tweeted his concerns about the "insane" energy usage required for cryptocurrency infrastructure.
The US 10-year treasury yield declined slightly to 1.671 per cent.
The ASX200 was down again yesterday, falling 0.8 per cent. This decline was led by Information Technology (down 4.7 per cent) and Materials (down 1.7 per cent). The fall in the Information Technology sector was prompted by international inflation fears, with the annual inflation figure (Consumer Price Index) currently at 4.2 per cent in the US.
Healthcare rose 1.1 per cent.
The biggest outperformer was energy company Whitehaven Coal, up 6.4 per cent fuelled by rising coal prices. Graincorp rose 5.3 per cent following the release of their half year 2021 results with full year EBITDA forecast risen to AUS$255-285 million, up from AUS$230-270 million.
The biggest underperformer yesterday was mining services group Perenti Global which plummeted 29.2 per cent. In a statement to the ASX, the company said it expects earnings and revenue for the second half of financial year 2021 and into 2022 to be lower. Specifics were not given around the extent to which investors can expect revenue and earnings to decline. This was the result of a multitude of factors, notably – a tightening labour market, the ongoing fallout from Covid and the increasing Australian dollar. Investors did not take this news as propitious and pushed the price down following the announcement.
Accounting software provider Xero fell 13.0 per cent yesterday. This followed the release of its full-year 2021 results. While growth and revenue figures were strong, analyst expectations were not met and there was slowing growth in subscribers in several markets. Subscriptions grew by 20 per cent year on year in Australia and New Zealand and 21 per cent year on year internationally. Despite 18 per cent yearly growth in North American subscribers, revenue in this market only grew by 2 per cent. Overall, EBITDA grew 39 per cent from 2020 to 2021.
This week Qantas has delayed the resumption of international flights after the Federal Budget announced the border will likely remain closed until the middle of 2022. Covid vaccine manufacturer, Moderna, has commented that they are open to producing the Covid vaccine in Australia and have agreed to supply Australia with 25 million doses. Vaccine rollout is ramping up with the largest number of people to date vaccinated for Covid in New South Wales yesterday.
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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-disclaimera>