Jarden Brief: Markets quietly await Federal Reserve policy meeting

Federal Reserve chair Jerome Powell. Photo / AP

Keeping you up to date with the latest market moves, in association with Investment firm Jarden

New Zealand:

On Wednesday, the NZX 50 decreased 0.8 per cent to 12,582.9 points.

The top performer of the day was Tourism Holdings up 5.0 per cent to $2.50. Synlait Milk increased by 4.9 per cent to $4.08 and Z Energy by 4.7 per cent to $2.92.

Z Energy's increase is linked to the company announcement made Wednesday morning. Due to its better-than-expected performance the firm renegotiated its debt covenant waivers and is expected to pay a full year divided for the financial year 2021. The dividend is expected to be between 12 to 14 cents a share and would be paid out around May 2021.

The worst performers were fishing company Sanford, down 7.6 per cent to $4.50, Contact Energy (- 4.5 per cent to $6.97) and Meridian Energy (- 2.8 per cent to $5.73).

Fonterra's Half Year results were good, although its reported profit after tax was down 22 per cent. This is due to divestitures of the business. When looking at the 'normalised' profit, there was an increase of 43 per cent over the six months until the end of January 2021, reflecting the underlying performance of the business. Thus, Fonterra will pay out an interim dividend of $0.05 per share. The results came with a warning about the predicted performance of the company over the next six months, since global dairy prices are increasing the profitability of Fonterra will be dampened.

This week the Government has talked about the introduction of incentives that are supposed to relieve the housing crisis. These incentives will be explained in next week's housing policy announcement, without there currently being any specifics of what they could look like.

INTERNATIONAL MARKETS
US:

At the time of writing, the S&P 500 was down 0.5 per cent, the DJIA was up 0.2 per cent and the NASDAQ had fallen 1.2 per cent.

This comes as investors await the outcome of the Federal Reserve policy meeting. Later today the Federal Reserve will release new economic and interest rate forecasts.

The top performing sector was Industrials, up 0.4 per cent, with the worst performing sector being Technology, losing yesterday's gains, down 1.2 per cent.

Today's top performing stocks are homebuilder and mortgage provider, Lennar Corp, up 9.6 per cent, and material science company, Dow Inc, up 3.7 per cent.

Lennar Corp released their earnings results for the quarter today. Consensus forecasts for earnings per share and revenue were exceeded. The company's revenue for the quarter rose 17.7% year-on-year with a revenue of US$5.3 billion for the quarter.

The stocks performing the worst overnight were NRG Energy Inc, an integrated power company, down 16.5 per cent, and Viacom, global media and entertainment provider, which had fallen 7.3 per cent at the time of writing. Viacom is on track for their largest intra-day loss since January 28 with no apparent news catalyst.

NRG Energy, the largest power generator and retailor in Texas, announced today that it is withdrawing its financial guidance after a February storm caused widespread damage across the state, estimating their own costs to be US$750 million. NRG fell significantly after this announcement, down 16.5 per cent at the time of writing.

Rest of the world:

Asian markets were relatively quiet yesterday with the Shanghai index falling 0.03 per cent, the Nikkei down by 0.02 per cent, and the Hangseng up 0.02 per cent.

This caution comes as the Federal Reserve March meeting result looms.

The WHO (World Health Organisation) released a statement continuing to recommend the AstraZeneca vaccinations. This came in response to the unfounded safety concerns and pausing of vaccine rollout as a result in many European countries.

Commodities:

Gold was down 0.2 percent, at US$1726.60 per ounce. Oil prices were in the red for the third day today, down 1.2 per cent to US$64.01 a barrel from a high last week. Of the crypto currencies, Bitcoin fell again, down 0.5 per cent and Ethereum recovered slightly, up 0.2 per cent.

Lastly, US 10-year treasury yields were up overnight at the time of writing, rising four basis points, hovering around 1.66 per cent.

Australian Markets:

The S&P/ASX 200 ended the session down 0.5 per cent. This was mainly in response to a poor performance from the Energy and Materials sectors which fell 1.0 and 1.4 per cent respectively.

Positive sector movers included Academic and Educational Services, which has been the top performing sector two days in a row, up 1.0 per cent. Technology, and Healthcare were in second and third, up 0.7 and 0.3 per cent respectively.

Single stock winners on the day included Restaurant Manager Collins Food Ltd which jumped 5.3 per cent after releasing its half-year earnings on Monday. Joining Collins on the winners podium was Property Investment company Westfield (Unibail-Rodamco Westfield) which was up 4.4 per cent.

On the flip side, Travel Services company Corporate Travel Management Ltd (CTD) fell 5.6 per cent as a result of a major sell down from one of its largest shareholders. Joining CTD were Poultry Producer Inghams Group Ltd which slipped 3.4 per cent as the company went ex-dividend.

In other news, political tensions between Australia and China continue to fester ahead of American President Joe Biden's first meeting with Beijing officials in Alaska on Friday (AEST). China and Australia have had shaky relations of late and may be hoping improved foreign affairs between the US and China might extend down under. Investors will be interested to see if China's current tariffs on Australian goods including wine, beef, coal, iron ore, and other materials could potentially be lifted in early 2021.

• 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