Keeping you up to date with the latest market moves, in association with Investment firm Jarden
New Zealand
NZX Market Wrap-Up:
The NZX50 had a strong performance yesterday as large-cap stocks a2 Milk (+3.5 per cent) and Auckland International Airport (+2.9 per cent) pulled the index with them, as it rose 0.8 per cent.
The best performer on the index was Pushpay rising 5.8 per cent to $8.20.
The Official Cash Rate was also announced yesterday to remain at 0.25 per cent. This was widely expected given the indication by RBNZ Governor, Adrian Orr, that it would remain at this level for at least the next 12 months from March 2020.
Coming up this morning, Mercury Energy and Oceania Healthcare have their AGMs.
Kathmandu impresses analysts – but apparently not the market
Kathmandu was the worst performer in the index despite releasing a seemingly strong 2020 financial year result, beating consensus estimates from analysts on key metrics.
Pre-guided underlying ebitda of ~$70 million was easily surpassed at $83.4 million, and underlying profit was $31.5 million – also above estimates.
No guidance was provided for the 2021 financial year, although the company noted the first seven weeks of the 2021 financial year did see mixed same-store sales performance. Given Kathmandu are currently operating in a "non-indicative trading period" these comments are not too material.
In line with other key trends to come out of the pandemic was the shift to online sales as Kathmandu's group online sales were up 63 per cent and now comprise 15.7 per cent of direct to consumer sales.
Unexpectedly, given a largely positive result, the stock traded down 7 cents or 5.5 per cent – the worst performer on the index yesterday.
International
Overnight wrap:
September, typically the worst month performance-wise, continues to test gains made since March. Uncertainty abounds as we approach the US election in November, and as talk of a second wave in Europe intensifies.
Asian markets:
At time of writing, the Shanghai Index was up 0.2 per cent, the Shenzhen index up 0.7 per cent and the Nikkei 225 down 0.1 per cent.
China is relaxing its border restrictions, permitting foreigners holding permits for work and those seeking to be reunited with family to return to the country. The reopening may be a welcome sight for those who have faced decreased export demand.
State media has also denounced the sale of TikTok's American business as "an American trap". This comes despite the deal initially looking like a win for China. Confusion remains over who will control the US entity and whether the ringfence around its data will be effective.
US Markets:
At time of writing the S&P 500 was down 0.9 per cent, the Dow Jones down 0.8 per cent and the Nasdaq down 1.7 per cent.
Though most peer indices were down, the large cap has underperformed – Tech at the top of the underperforming sectors list.
Global giant Nike was the best performer of the main index, jumping 9.6 per cent on release of its first quarter earnings. Revenue data was more impressive than expected with online sales picking up much of the bricks and mortar sales lost to coronavirus lockdowns.
Nike's performance also dragged other sportswear companies up, with Under Armour and fellow activewear company HanesWares rising 7.9 per cent and 3.6 per cent, respectively.
Chemicals developer and Manufacturer Albemarle was the worst stock in the index, falling 13.9 per cent. The company produces battery inputs and the stock reacted to Tesla's announcement that it planned to halve the costs of its own batteries.
Commodities:
At time of writing, Gold was down 1.9 per cent to US$1868.50 per ounce. WTI Crude was up 0.5 per cent, trading at US$37.28 per barrel. The US Treasury 10-year yield was flat at 0.68 per cent.
Australia
ASX Market-Wrap:
The ASX 200 had its best one-day performance in over 9 weeks, rising 2.4 per cent to a level of 5924 points after being at a 3-month low on Tuesday. The Australian markets were buoyed by the positive performance of American stocks overnight and the speculation that the RBA will cut rates in October to 0.1 per cent. All indices were up between 2.3 and 2.5 per cent except for the small ords index which was up 1.6 per cent, further demonstrating market preference for large cap stocks.
Every sector was in the green today by a large margin, with Industrials and Academic & Educational services the key outperformers - both up 3.6 per cent a piece.
The underperforming sector on the day was Basic Materials (+1.1 per cent), with Ramelius Resources Ltd (-7.3 per cent) and Northern Star Resources Ltd (-2.1 per cent) being sold off after key spot prices were softer overnight. Service Stream Ltd was the best performer on the day, up 14.1 per cent despite no new announcements made.
Nufarm rose by 4.4 per cent despite announcing a loss of A$456 million, with the news of the commercial sale of its new Omega 3 canola venture enough to keep investor sentiment positive. They forecast that this could become their biggest product due to the million-tonne global deficit, leaving a large potential market for them to join.
Buy-Now-Pay-Later sector had a mixed day with AfterPay and Zip posting gains of 2.9 and 3.0 per cent respectively, but new-to-market LayBuy down 3.6 per cent. Pressure seems to be continuing to build in this market, with international conglomerate PayPal set to join soon and credit card spending beginning to rise once again, which detracts from the sector's uptake.
Coming Up Today:
13 companies will IPO in the US, including cancer drug developer Prelude Therapeutics. Apart from this, 23 companies, including household name Costco, will report earnings.
Meanwhile in Australia, the AI Group Manufacturing Index and Markit Manufacturing PMI Final will be out later in the day with expected month-on-month declines.