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US Markets:
US Markets have rallied overnight, led by Tech stocks, and it appears the markets are a far cry from the predictions of a tightly contested race and what that would mean for markets.
At the time of writing, the Dow Jones is up 2.9 per cent, S&P 500 up 3.4 per cent and the tech-focussed Nasdaq climbing 4.5 per cent.
With the Senate looking less likely to flip to the Democrats, markets have surged, as the likelihood of higher taxes, tougher regulation and changes to stimulus under the Democrats is now slimmer even under a Biden presidency.
Every sector is in the green with Health, Communication Services and Technology all up over 4 per cent.
With Trump having already claimed an early victory and calls to go to the Supreme Court, don't expect him to go down without a fight. This could mean a potential rollercoaster for equity markets, if the election drags out for days and weeks ahead.
Asian markets:
The Nikkei had a strong performance as it rose 1.7 per cent. The Shanghai stock exchange was slightly in the green as it rose 0.2 per cent, while the Hong Kong stock exchange was down 0.2 per cent.
Alibaba's Hong Kong-listed shares tumbled by more than 7 per cent yesterday, after the suspension of Ant Group's world record-setting initial public offering was suspended. Alibaba has a 33 per cent stake in the company. Meanwhile, in the US overnight the shares have somewhat recovered, at the time of writing up 4 per cent.
New Zealand
The S&P NZ50 was up 0.6 per cent on Wednesday, with the market reacting to US election news flow across the day.
Real estate investment trust, Precinct Properties, was the best performer in the index, up 3.5 per cent. Medical diagnostics company, Pacific Edge, also had a good day, up 2.9 per cent. Despite a positive FH21 result, payments solutions company, Pushpay, was the poorest performer on the day, down 8.7 per cent. A2 Milk was down 0.8 per cent, with investors potentially speculating that a possible Trump re-election could be bad for trade channels with China.
Read More
- Jarden Brief: How a disputed US election will affect markets - NZ Herald
- Jarden Brief: The winners and losers on a tough day for the NZX - NZ Herald
- Jarden Brief: US market bounces back - NZ Herald
- Jarden Brief: Why China is keeping a close eye on Biden - NZ Herald
- Jarden Brief: The Chinese giant posing a risk to the market - NZ Herald
Z Energy (up 1.7 per cent) released its half year results. The period was impacted by Covid-19 lockdowns and weak refining margins. The company reported EBITDAF of $95 million, down 48 per cent on the prior comparable period. In response, the company has cut costs and is on track to have cut $60 million per year by 2022. The balance sheet has been managed with the goal of reinstating dividends by 2022. Management reinstated full year EBITDAF guidance of between $235 and $265 million.
Pushpay also released half year results. Operating revenue of US$85.6 million was up 53 per cent on the prior comparable period. Further revenue growth is expected as the company penetrates the US faith sector. The company has also improved gross margins by three percentage points. Net profit after tax was US$13.4 million, which was up 107 per cent on the prior comparable period.
Commodities:
At time of writing, Gold was down 0.6 per cent, trading at US$1899 per ounce. WTI Crude was up 3.5 per cent, trading at US$38.97 per barrel. The US ten-year treasury yield slipped to 0.78 per cent, a 2-week low as the election result fails to show any clear winner.
Australia
The Australian markets saw high volatility in Wednesday's trading session, matching an equally fast paced US election day.
The benchmark ASX 200 swayed between positive and negative, going as high as 0.5 per cent, before settling at a 0.1 per cent decrease. The initial fall came after news that Trump had performed beyond expectations in the key state of Florida, before the index tracked US futures index up later in the afternoon.
Banks underperformed across the board with Bank of Queensland (-2.8 per cent), Westpac (-2.0 per cent) and CBA (-2.0 per cent) all declining after the RBA rates decision on Tuesday.
Major bank CBA announced a new historically low home loan rate of 1.99 per cent in response, a full 100 basis point cut from its prior rate.
Other blue chips which underperformed were Coles (-2.3 per cent), Rio Tinto (-2.2 per cent) and Telstra (-1.1 per cent). However, Penal Group was the biggest decliner after it reported a full year profit of A$116.4 million, which was 24.7 per cent lower than last year.
Meanwhile, tech stocks followed the NASDAQ higher with Megaport rising 6.6 per cent, Nearmap up 5.6 per cent and NEXTDC advancing 4.9 per cent. Healthcare tech company, Nanosonics, was the leader of the index stocks, rising 12.5 per cent after a positive revenue update.
Morning headlines reported China's alleged decision to 'suspend' Australian wine imports, with many Chinese importers receiving verbal instructions to stop shipments by this week. Sources have also said that shipments of Australian lobster, sugar, coal, timber, wool, barley and copper ore will also be unofficially suspended by Friday.
Australian wine exports to China were more than $1.2 billion in 2019, and together with the other commodities up for suspension, this decision may potentially put a A$5 to A$6 billion dollar dent in Australia's economy.
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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
