The US is set to give the economy another boost through infrastructure spending. Photo / Getty Images
Keeping you up to date with the latest market moves, in association with Investment firm Jarden
New Zealand:
The NZX ended flat yesterday, weighed by a drop in index heavyweights Ebos (-1.2 per cent) and Fisher & Paykel Healthcare (-0.8 per cent).
Property stocks saw significant action as the most traded stocks of the day, although a large number of Meridian shares also changed hands.
In what may be disappointing news for transaction advisers on both sides of the Tasman, Westpac has confirmed yesterday morning that it will be retaining 100 per cent of its New Zealand operations.
The Australian bank had originally considered spinning out its Westpac New Zealand subsidiary in response to tougher capital requirements from the Reserve Bank back in March this year. Some market commentators estimated the New Zealand business to have a potential valuation north of $11 billion – which would have put it in the top five companies on the NZX by market capitalisation.
No unwelcome surprises came out at Oceania Healthcare's (-1.4 per cent) AGM, with all developments progressing in line with expectations set out at their last result.
Campervan rental company Tourism Holdings climbed by 5.2 per cent after it improved its guidance to an expected $14 million to $18 million loss for the year, with more robust vehicle sales in the US beating the management team's prior expectations.
Although no guidance for the next financial year was provided, confirmation that the company has renewed its $250 million banking facility for the next three years was likely welcome news for investors.
On the positive side, more than 1,200 COVID-19 tests in the Wellington region have turned up negative following the latest potential outbreak in Wellington. The man's partner has also tested negative. The NZ Government continues to await genomic sequencing results to ascertain whether the man had the highly infectious Delta variant of the virus.
INTERNATIONAL
US:
At the time of writing, the major US indices were all trading in the green. The S&P500 increased by 0.6 per cent, hitting a 52-week high at 4,271.2 points. The NASDAQ was also up 0.6 per cent, and the DJIA rose 1.0 per cent.
Most sectors were making gains, led by Financials (+1.2 per cent) and Industrials (+0.9 per cent). Only Real Estate (-0.6 per cent) and Utilities (-0.2 per cent) were underperforming this morning.
Drug manufacturer Eli Lilly and Co was the top performer, trading 7.8 per cent higher at the time of writing. It is said that based on the precedent set by Biogen, Eli Lilly will file for accelerated approval with the Food and Drug Administration for its Alzheimer's drug.
This move comes earlier than analysts expected. Next in line was electric car manufacturer Tesla, rising 4.0 per cent after Elon Musk tweeted about the company's planned satellite broadband service Starlink. He said that the broadband service would only publicly list once the revenue is reasonably predictable, which he thinks might take a few more years. Equipment rental holding company United Rentals Inc also made it onto the leader board, up 3.7 per cent.
Due to Eli Lilly making moves in the Alzheimer's drug market, competition for Biogen increased. With Eli Lilly being further along with its clinical trials, biopharmaceutical company Biogen Inc fell 5.5 per cent. Real estate investment trust operator, Equinix Inc, decreased by 3.6 per cent. Rounding out the biggest losers of the day was Generac Holdings dropping 3.1 per cent. The power generation equipment manufacturer faced a big sell off after opening the session with a new 52-week high.
Yesterday, US president Joe Biden met with Senate to discuss a US$1.2 trillion proposal regarding infrastructure projects, building roads, bridges and highways and stimulating the economy. After months of negotiation, Biden announced that they had agreed on a deal, which is said to be a good compromise between Republican and Democrat members of the group. Further information about the details of the agreement will be announced later today.
Rest of the World Markets:
The Shanghai index and the Nikkei remained unchanged, while the Shenzhen index decreased 0.4 per cent and the Hang Seng increased 0.2 per cent.
Brought on by the pandemic, there was a call for more fiscal integration within the Eurozone. Countries that are part of the zone follow the same monetary rules and share the same currency, but fiscal policy still varies between the members. Last year in July, EU leaders announced that the European Commission would be tapping the markets on their behalf, bringing more stability to the EU. However, with the upcoming election in
Germany, which will take place in September this year, there might be further headwinds.
The new potential chancellor from the conservative party CDU and the next German government seem unlikely to push for the integration.
Commodities
Precious metals were underperforming, with Gold trading 0.4 per cent lower at US$1,777 and Silver decreasing 0.1 per cent to US$26.07.
Oil edged slightly higher, up 0.3 per cent to US$73.28.
Cryptocurrencies were all in the green. Bitcoin rose 5.4 per cent, and Ethereum was up 4.2 per cent.
The 10-year treasury rate remained mainly unchanged, yielding 1.485 per cent.
Australian Markets:
The ASX200 closed 0.3 per cent lower yesterday.
Eight of eleven sectors declined, with Healthcare down 1.8 per cent and Energy down 1.2 per cent.
The top-performing sectors were Information Technology and Consumer Staples, up 2.1 and 1.9 per cent, respectively.
The online artwork marketplace, Redbubble, was the top-performing stock of the ASX200 yesterday, rising 7.1 per cent. This followed the release of a litigation note on its US subsidiary Redbubble Inc which is currently undergoing court proceedings with Brandy Melville relating to alleged intellectual property infringement.
The radiology information systems provider, Pro Medicus, rose 6.9 per cent. Another outperformer was Afterpay, up 6.2 per cent.
Woolworths was the worst-performing stock of the session, down 11.2 per cent. Earlier in the week, it released a significant items and supply chain update. Notably, AU$69 million of transaction costs relating to the demerger of the Endeavour Group and the acquisition of PFD Food Services.
Gold producer Northern Star Resources fell 3.7 per cent, announcing a change of director earlier in the week, and building material company Boral fell 3.6 per cent, likely related to yesterday's share buyback.
• 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