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New Zealand
The SPX NZ50 was flat on the day. Smaller stocks outperformed as the NZX Small Cap index rose 1.0 per cent. The NZ10 was down 0.3 per cent with Fisher and Paykel Healthcare and A2 Milk the main decliners.
The best performing sectors on the day were Consumer Cyclicals, up 0.8 per cent, and Real Estate, up 0.4 per cent. Consumer Non-Cyclicals and Healthcare were the worst performing sectors on the day, respectively down 1.3 per cent and 0.6 per cent.
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Cancer screening company Pacific Edge was the best performer on the day, up 7.1 per cent. It was followed by retail bank Heartland Group Holdings, up 3.4 per cent. Dairy company, Synlait Milk, was the worst performer on the day, down 3.2 per cent. It was followed by film technology company, Vista Group, down 1.7 per cent.
Integrated services company, Downer, announced that it has entered an agreement to divest 70 per cent of its laundries business to an Australian private equity firm. While retaining a 30 per cent stake in a business that is said to be recovering well after lockdown measures, Downer has removed a good portion of one of its most capital-intensive segments from its balance sheet. The buyer, Adamantem Capital, has said it will work to grow the business and retain its 1900 employees.
Prime Minister, Jacinda Ardern, yesterday declared a climate emergency and committed the government and the public sector to transition to carbon-neutrality by 2025. New Zealand now joins 32 other nations in formally acknowledging the global crisis. The policy will see a phasing out of coal and a transition to electric vehicles.
This policy might spur investors to evaluate which industries will stand to lose out, and which will stand to gain from increasing momentum towards environmental consciousness. Electric vehicle manufacturers have long been the beneficiary of these trends and investors may have to consider businesses for which environmentalism is a less direct benefit.
International
US Markets:
At time of writing, the main three indices were mostly flat, with the SPX500 up just 0.5 points, the Dow Jones Industrial dipping 0.1 per cent and the Nasdaq down 0.2 per cent.
Gains made by an outperforming Energy sector (+3.9 per cent), Healthcare stocks (+0.9 per cent) and the Financial sector (+0.8 per cent) were offset by minor drops in most other sectors, with Real Estate (-0.7 per cent) and Basic Materials (-0.7 per cent) performing the worst.
Pfizer and BioNTech rose by 3.1 per cent and 5.1 per cent respectively, after a national rollout of their collaborative vaccine in the UK will go ahead next week, following the UK government giving approval overnight.
Oil stocks performed well in response to a continuous increase in spot prices, with Occidental (+7.8 per cent), Devon (+6.6 per cent) and Marathon (+5.6 per cent) all pushing the sector higher.
Meanwhile, Salesforce dropped 6.8 per cent after Wall Street reacted negatively to its announcement that it will be buying workplace collaboration tool, Slack, for a grand sum of US$27 billion. The purchase price is to be made up of cash and stock, and impliedly values Slack at US$45.86 per share. Slack last traded at US$43.15, dropping by 1.6 per cent in response to the acquisition.
Asian markets:
Asian markets were also stable, with the Shanghai (-0.1 per cent), Hangseng (-0.1 per cent) and Nikkei (+0.1 per cent) all flat. News affecting the markets was limited, and headlines were dominated by the sentencing of Hong Kong democracy activists Joshua Wong, Agnes Chow and Ivan Lam, for between seven and thirteen months.
Commodities:
At time of writing, Gold was up 0.6 per cent at US $1,826.75 per ounce. WTI Crude was up 2.2 per cent, trading at US$45.48 per barrel. The US 10-year Treasury yield continued to climb now at 0.953 per cent.
Australia
The ASX closed flat yesterday, with gains in Mineral and Mining stocks dragged by declines in the Healthcare and Technology sectors.
September GDP numbers showed the Australian economy rebounding 3.3 per cent during the quarter, the best quarter on quarter growth in more than 40 years. The figure beat economist estimates, who were less bullish on recovery - with consensus estimates at 2.5 per cent. However, keep in mind these growth numbers are off the back of a lockdown-inundated April to June quarter - and compared to September 2019, GDP is still down by 3.8 per cent.
Sandfire Resources was the best performer on the market - up 12.3 per cent after investors reacted warmly toward its strategic update. Other companies in the sector also performed well - Westgold Resources was up 6.7 per cent off the back of a restrengthened gold price, Lynas continued to rally, up another 4.6 per cent, and Perseus Mining was also up by 3.9 per cent.
Meanwhile, Mesoblast rallied 7.3 per cent after receiving a positive designation from the US Food and Drug Administration for its therapy treatment of Covid-19 patients that are in a serious condition.
The market seemed ambivalent to Westpac's confirmation of its sale for its insurance business to Allianz for A$725 million, with shares closing at A$20.30.
On the other hand, ASX-listed Nearmap, which provides aerial imagery technology and location data, slid by 5.6 per cent as the benchmark index's worst performer of the day.
Coming up
New Zealand
New Zealand will release Building Permit information this morning.
International
America will release economic data on Initial Jobless Claims, Markit Services/Composite PMI. The Eurozone is releasing data on Retail Sales, Markit Services/Composite PMI. China is also releasing data for their Caixin Composite/Services PMI.
Australia
Australia will be releasing more macroeconomic figures, including home loan stats and Services/Composite PMI's from Markit.
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