Jarden Brief: US markets in the red, Nasdaq down 2.4%

US stocks were struggling this morning. Photo / Getty Images

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

Coming Up Today:

The US balance of trade numbers.

New Zealand:

On Tuesday, the NZX50 recorded a strong performance, increasing 1.1 per cent.
Ahead of the Global Dairy Trade Auction, milk powder producer A2 Milk and dairy company Synlait Milk increased 3.4 per cent to $7.99 and 3.0 per cent to $3.39 respectively, closing as the top performers of the day. Napier Port Holdings (+2.3 per cent to $3.57) rounded out the top performers, correcting some of the losses from Monday's session.

The GDT auction this morning saw fats down after additional butter supply was announced last week. AMF was down 4.2 per cent and butter was down 12.1 per cent. The large increases seen in US corn prices in the past 3-4 months have pushed US SMP prices higher and supported the values seen in other origins, including New Zealand.  WMP was up 0.7 per cent, SMP was up 2 per cent, BMP was up 14.4 per cent and cheese was down 4.5 per cent. The GDT index was down 0.7 per cent overall.

Corporate travel solutions provider, Serko, was the worst performer of the session, decreasing 1.4 per cent to $6.90. Next in line was Westpac Banking Corp (-0.9 per cent to $28.03), giving up some of its gains from the previous session. Pacific Edge (-0.9 per cent to $1.14) also underperformed. On Monday, the cancer diagnostics company announced that it will release its full year results on 27 May 2021. Additionally, the company shared the news of Mark Green becoming its new independent director, effective from 10 May 2021.

Yesterday, Seeka (no change at $5.50) announced the successful amalgamation with Opotiki Packing and Cool Storage Limited (OPAC). The $59.0 million transaction resulted in Seeka issuing 7,042,574 new shares to OPAC shareholders (ratio 1.4833:1) and assuming $25.09 million of OPAC debt.

Due to the New Zealand economy doing better than expected, the Government has a $926 million surplus from its COVID-19 response. Finance Minister Grant Robertson said that the 2021 Budget would be a recovery budget, and that the money saved from the pandemic response will be used to help the economy recover further. Additionally, the Government will be able to start paying down the debt accrued from the pandemic.

INTERNATIONAL
US Markets

At time of writing, US markets were in the red. The Dow Jones Industrial Average down 0.2 per cent, the Nasdaq down 2.4 per cent, and the S&P500 down 1.0 per cent.

The Materials and Energy sectors led the way again, up 0.7 and 0.6 per cent, respectively. 
It was a day of earnings result releases for the best and worst-performing stocks of the S&P500.

The best performing stock of the S&P500 this morning was research and advisory firm Gartner, which rose 12.6 per cent to a new 52-week high. This came following the Q1 2021 results release with revenue up 8 per cent and earnings per share well exceeding forecasts in being US$2.00, up from US$0.95 forecasts. Investors responded positively to this news.

Sealed Air, a packaging company, was another outperformer, rising 8.0 per cent. Net income for Sealed Air for Q1 2021 was US$110.1 million and earnings per share exceeded forecasts by US$0.71 cents, beating expectations.

In contrast, Consumer Discretionary and Technology were the worst-performing sectors at the time of writing, falling 1.8 and 2.3 per cent, respectively.

IPG Photonics decreased 9.2 per cent following an earnings result release that was in line with guidance. Their CEO is transitioning.

Catalent, a pharmaceuticals company, decreased 8.3 per cent following the Q3 2021 results release, with earnings per share exceeding forecasts, but only by a slim US$0.07 to US$0.82.

It appears that this earnings season, investors are expecting guidance to be well exceeded and are otherwise responding unfavourably.

The first day of Epic Games' anti-trust trial against Apple began yesterday. This follows alleged breaches of the App Store rules last year through the implementation of an in-app payment system in Epic Games' Fortnite app and its subsequent removal from the App Store.

All Birds, the sustainable footwear and apparel company, is set to list on the Nasdaq this year. The American-New Zealand B-Corp sells over a million pairs of shoes each year and was valued in October at US$1.7 billion. Their first and incredibly popular sneaker is made of merino wool.

Asian Markets

Asian markets were a mixed bag this morning. The Hang Seng rose 0.7 per cent, while the Shanghai Composite and Nikkei both slipped 0.8 per cent again.

Commodities

Among the main commodities today, gold fell by 0.7 per cent to US$1,778.00 per ounce. WTI Crude oil rose 2.0 per cent, to US$65.77 per barrel. This was likely driven by economic optimism in the US and Europe increasing demand.

Crypto movements include Bitcoin trading down 5.2 per cent and another day of gains for Ethereum, up 2.1 per cent at the time of writing.

The US 10-year bond is currently yielding 1.59 per cent.

Australian Markets:

Australian equities were in the green yesterday with the S&P/ASX 200 trading up 0.6 per cent to 7067.9 points at yesterdays close.

More macroeconomic data came through today with the Australian Bureau of Statistics (ABS) releasing international trade in goods and services data for March. Although somewhat expected, the results were not encouraging as the trade surplus fell from +$7,595m to +$5,574. This was primarily due to exports slowing by 2 per cent and imports up 4 per cent for the month. Economists point out a significant reduction in exports to China as one of the main causes for the fall, as relations between Canberra and Beijing continue to effect trade between the two nations.

Sector gains included Basic Materials and Energy, each leading the way with 2.2 and 1.9 per cent gains respectively.

Overall index movements were well supported by the single stock winner Chalice Mining Ltd, which jumped 6.0 per cent. Similarly, De Grey Mining Ltd also traded favourably, increasing 5.8 per cent.

On the other hand, markets were weighed down by both the Academic Services and Technology sectors which have fallen 1.0 and 0.9 per cent at the time of writing.

The underperforming single stocks included Flight Centre Travel Group Ltd, falling 4.6 per cent. The company failed to impress investors after yesterday's trading update. Furthermore, cloud computing company Megaport Ltd struggled during yesterday's trading, down 4.2 per cent.

• 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-disclaimera>