Keeping you up to date with the latest market moves, in association with Investment firm Jarden
The NZX50 closed slightly lower yesterday, decreasing 0.5 per cent.
Restaurant Brands New Zealand (+4.1 per cent to $13.95), which operates fast food chains such as KFC, Pizza Hut and Taco Bell in New Zealand was the biggest climber, continuing its upward trend over the last five days.
Dairy company, Synlait Milk (+2.7 per cent to $3.48), was among the top performers for a second day in a row, after the Global Dairy Trade (GDT) auction resulted in a 0.7 per cent decrease in the GDT Price Index compared to the auction in April.
Rounding off the best performers was cinema software provider, Vista Group International, increasing 2.0 per cent.
Fisher & Paykel Healthcare was the worst performer of Wednesday's session, decreasing 2.8 per cent to $34.55 ahead of its full-year result on 27 May 2021.
Australia New Zealand Banking Group (-2.6 per cent to $30.32) also performed poorly, despite reporting a 42 per cent increase in cash profit for the half-year to March in its interim result.
Corporate travel booking platform, Serko, was not able to break its downward trend, declining a further 2.2 per cent to $6.75 with a worsening covid situation in Asian countries continuing to add to market pessimism around the prospects of corporate travel restarting.
In macro news, Statistics New Zealand released its labour market statistics for the March quarter which showed a slight decrease in unemployment to 4.7 per cent. While levels still have not returned to pre-pandemic levels, the result was better than most expected, and ahead of the Reserve Bank's forecasts by two years. The underutilisation rate rose by 0.4 per cent quarter-on-quarter to 12.2 per cent, suggesting there are more people who can and want to work more hours than they currently do.
Headlines were dominated by the Government announcement of a three-year extension of the pay restraint for public servants. Under the restrictions, pay increases will be suspended for public servants earning more than $100,000, while those earning between $60,000 and $100,000 will only receive increases under select circumstances. Finance Minister, Grant Robertson, claims that this measure will help to manage public debt, while also pointing to the importance of leading by example. The announcement has received widespread backlash from a number of unions and associations.
US markets were in the black this morning at the time of writing, with the Dow Jones Industrial Average recovering yesterday's losses, up 0.4 per cent, the Nasdaq up 0.2 per cent, and the S&P500 gaining 0.3 per cent.
The Energy (+2.8 per cent) and Materials (+1.3 per cent) sectors led the way up for the second day in a row, while Utilities (-2.2 per cent) and Real Estate (-1.4 per cent) were the worst performing sectors.
The best performing stock of the S&P500 this morning was PerkinElmer, up 7.7 per cent. This diagnostics company rose on the back of the Q1 results release with adjusted earnings per share rising 455 per cent year on year to US$3.72.
Activewear retailer, Under Armor, was another outperformer, rising 7.5 per cent. The Q1 results release showed revenue up 35 per cent to US$1.3 billion for the year and a 69 per cent growth in e-commerce driven by Covid-related business.
Data analytics provider, Verisk Analytics, fell 7.8 per cent. In their first-quarter report released today, revenue rose 5.3 per cent, while net income fell 1.8 per cent compared to the same quarter last year.
HollyFrontier, a petroleum refiner, lost 6.1 per cent. The fall came following the reporting of a larger than expected March quarter loss and suspension of its quarterly dividend.
In macroeconomic news, the US intends to raise corporate taxes by raising the global minimum tax rate (including the US corporate tax rate) and closing loopholes that allow American companies to avoid tax or pay less outside America. Treasury Secretary, Janet Yellen, says this would end the global "race to the bottom" and would help raise revenue for countries in the post-Covid environment facing significant fiscal deficits.
A global semi-conductor chip shortage is affecting many industries, but notably the automotive industry worldwide. Ford indicated their production could be cut by 1.1 million cars in 2021 due to this shortage, with second-quarter production to be cut by half.
Rest of world:
Asian markets were in the red overnight following the sell-off of technology stocks in the US. The Hang Seng fell 0.5 per cent, while the Shanghai Composite and Nikkei both slipped 0.8 per cent for the third day in a row.
Gold increased its value by 0.4 per cent to US$1,784.00 per ounce. Gold typically has an inverse relationship with the USD – and today's gain correlated with a soft USD overnight.
Crypto movements include Bitcoin recuperating yesterday's loss and trading up 5.5 per cent, as well as another day of gains for Ethereum, up 0.9 per cent at the time of writing.
The US 10-year bond is flat and currently yielding 1.589 per cent.
Australian equities finished in the black yesterday with the S&P/ASX 200 closing up at 7095.8 points, rising 0.4 per cent.
Another raft of macroeconomic data was released, this time in the construction industry. Firstly, the construction sector sentiment gauge (PCI Index) eased to 59.1 points from 61.8, still at a reasonable level.
March building approvals, which are a leading indicator of housing market supply and potential pricing implications, rose to the highest level since 2017 - up 21.6 per cent from February and bringing annualised total approvals to 278,000. This is encouraging data for the sector which was expected to be adversely affected after applications for building subsidies through the government's 'homebuilder' programme closed on April 14th.
Outperforming sectors included Academic & Educational Services and Basic Materials, which recorded gains of 3.7 and 0.9 per cent, respectively.
Sector gains were buoyed by impressive performances from photomapping company, Nearmap Ltd (+14.6 per cent), and manufacturer, Brickworks Ltd (+4.2 per cent).
Nearmap jumped after the company released earnings guidance which exceeded expectations - followed by a trading halt pending the announcement of potential legal proceedings from a US-based rival.
In contrast, downward pressure on market indices was drawn from sector losses in Industrials (-1.0 per cent) and Consumer Cyclicals (-0.3 per cent).
The day's underperforming stocks consisted of travel company, Flight Centre Travel Group, along with plastic manufacturer, Polynovo Ltd, which fell 5.4 and 5.1 per cent respectively.
Coming up Today:
In New Zealand, the ANZ Business Confidence and Activity Outlooks are set to be released later today. Z Energy will also be reporting its full-year result today. Z has dropped by more than 15 per cent since the start of the year, and has fallen significantly from its previous levels of more than $6.50 a share just two years ago.
Australian majors bank, NAB, will be publishing its first-half results, while Tiwai Point-operator, Rio Tinto, market data provider, IRESS, and TPG Telecom will be hosting their AGMs.
Investors may also be looking forward to next Tuesday, which is the scheduled release date for the Australian Government's 2021 budget. Expectations are for a continued focus on spending to boost Covid-19 recovery, potential incentives designed to improve the current government's popularity with women, and some cost-saving initiatives that tackle the increasing financial burden of an ageing population.
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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>