Apple had a massive result despite the impact of Covid-19. Photo / Getty Images
Keeping you up to date with the latest market moves, in association with Investment firm Jarden
New Zealand
The S&P NZ50 finished the day down 2.2 per cent with no stocks in the green. Smaller companies outperformed relatively with the S&P NZ Small Cap Index down only 0.9 per cent. Some have speculated that the mania surrounding the Gamestop short squeeze has translated into institutions liquidating some New Zealand positions.
All sectors were down on the day with the best performing sector, Energy, falling 0.7 per cent. Information technology and Utilities were the worst performing sectors, both falling 4.3 per cent.
Real estate investment trust Investore Property Limited and dairy company Fonterra Shareholders Fund were the best performers, the only companies flat on the day when the rest of the index was down.
The worst performing company on the day was retailer generator Meridian Energy, down 7.0 per cent, followed by payments solutions company Pushpay Holdings, down 6.0 per cent, and Contact Energy, down 4.5 per cent.
Meanwhile, competitor Trustpower (down 0.3 per cent) has signalled that it intends to invest heavily in renewables generation as it formally moves to receive offers for its retail business. In a conference call, the management team said that a new generation development strategy had been unanimously endorsed by the board and linked the strategy to the government's target for net zero carbon emissions by 2050.
The company is now looking to extend generation capacity beyond the previous target of 60 gigawatt hours per year. With the current interest around electric vehicle and battery technology in US markets, this tack could prove an advantageous one for Trustpower's shareholders.
INTERNATIONAL
US Markets:
Stocks rebounded overnight with the S&P 500 up 2.0 per cent, the Dow Jones up 1.9 per cent and the NASDAQ index up 2.0 per cent.
All sectors were back in the black – with the Financial sector recording a 2.9 per cent gain after the short squeeze of 2021 started showing signs of slowing. The Communications sector (+2.9 per cent), Industrials (+2.5 per cent) and Health Care (+2.3 per cent) were also up strongly – with only Consumer Staples (+0.9 per cent) advancing by less than 1 per cent.
Yesterday was a big day for the market with a number of big names reporting earnings. Tesla seemed to disappoint market expectations after reporting an earnings per share of 80 cents, missing its Wall Street consensus by 22.3 per cent.
Meanwhile, Apple smashed most metrics out of the park – with earnings per share of $1.68 per share, 19.2 per cent ahead of consensus, and revenue of $111.44 billion, marking the first time the company has ever achieved 12 digit sales in a year.
Facebook was also impressive, delivering shareholders a profit of $3.88 per share and revenue of 6.2 per cent.
Shares in the recently surging Gamestop fell after word was out that low-cost retail brokers such as Robinhood, Interactive Brokers and TD Ameritrade were beginning to restrict trading in certain stocks. In some cases, the controversial move was made by brokers to prevent any new buying in shares such as AMC, Gamestop, Blackberry and Koss in an effort to control volatility – although selling was still allowed.
Meanwhile, shares in CD Projekt, the developer for Cyberpunk 2077, climbed 12.6 per cent after Elon Musk tweeted that he liked the stock.
Asian markets:
Asian markets on the other hand, followed the US market movement on Wednesday – dropping harshly. The Shanghai index was down 1.9 per cent, the Nikkei was down 1.5 per cent, and the Hangseng fell 2.6 per cent.
Commodities:
At time of writing, Gold was down by 0.3 per cent, trading at US$1839.06 per ounce. WTI Crude was down 1.0 per cent, trading at US$52.33 per barrel.
Australia
The S&P ASX200 finished the day down 1.9 per cent, led down by drops in tech stocks (-4.6 per cent) and Healthcare (-2.8 per cent). Meanwhile, the most resilient sectors were Utilities, up 0.3 per cent, and Real Estate, which lost 0.5 per cent.
The best performing company on the day was commercial real estate company Unibail-Rodamco-Westfield, which jumped 14.5 per cent, despite making no announcements on the ASX. Given the high amount of short interest in the stock, the move was likely due to the current short squeeze contagion. Recently, embattled Treasury Wine Estates (+5.9 per cent), which has been struggling since the Chinese government imposed tariffs on its wine imports, was also up for a similar reason.
Meanwhile, the worst performing company on the day was investment advice company IOOF Holdings, which fell 10.6 per cent.
After its bumper performance yesterday, accounting software company Xero fell 6.3 per cent. Rare earths company Lynas Rare Earths (-5.9 per cent), having been a beneficiary of the recent demand for all things electric vehicle-related, experienced a pullback.
Increasing focus on reducing emissions by the Chinese government has driven speculation that steel mills could be closed or face reduced production. Fortescue Metals Chairman Elizabeth Gaines has stridently disagreed with claims that China could scale back steel production, thereby removing key demand for iron ore that has seen Fortescue and Rio Tinto awash with cash in recent months.
On the contrary, Gaines was predicting modest growth in 2021 demand, which would be more than enough to support current prices, especially given inventories decreased by the ongoing commodity super cycle. Demand for commodities so far has seen the three big mining companies pay out more in dividends than the four large Australian banks this year, according to analysis by UBS.
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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