Jarden Brief: Major rebound in rocky relationship with inflation

Domino's Pizza was the biggest beneficiary in a bizarre Wall St rally overnight, after topping market expectations in third quarter US sales. Photo / Supplied

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

International

US

Markets leapt overnight in the US, with the S&P 500 up 2.5 per cent and the Nasdaq up 2.1 per cent.

Equity buyers returned to the market after a 6.6 per cent core inflation print, the highest since 1982, drove hope that the inflation cycle could be short and sharp instead of drawn-out.

All sectors ended in the green, with energy stocks up 3.9 per cent and financials up 3.3 per cent as the best performing groups of companies.

The best performing stock of the day was Domino's Pizza, which climbed 9.8 per cent after topping market expectations in its third quarter US sales.

Competitor Papa Johns also rose 5.9 per cent, with investors having appeared optimistic about a positive earnings report from the company on 3 November.

Delta Airlines gained 4.4 per cent after a positive third quarter update, reporting net income of US$695 million on the back of surging summer travel and price hikes across routes, noting that summer travel to Europe was especially strong.

Fourth quarter guidance was also at the high end of market forecasts, guiding toward earnings per share of US$1.00 to US$1.25.

In technology stocks, Netflix gained 4.1 per cent after it launched its controversially received ad-support plan.

Meanwhile, the worst performing stock of the day was online retailer Etsy, which fell 9.8 per cent as sellers continued to hammer the stock down.

Rest of the World

European markets bounced back after a rocky start, with the Stoxx 600 erasing earlier losses of 1.6 per cent to finish up 0.9 per cent at close. Banks, travel and leisure stocks outperformed, while consumer staples continued to face selling pressures.

International Airlines Group surged 8.6 per cent after the company noted a third quarter that was 'better than expected'.

Commodities

Cryptocurrency assets continued to fall despite the equities market rally, with Bitcoin down 0.3 per cent to US$19,111 and Ethereum dropping 2.4 per cent to US$1,268. Listed cryptocurrency exchange operator Coinbase opened over 12 per cent lower, although managed to recover most of its losses later in the day.

Australia

The ASX 200 slipped 0.1 per cent yesterday, with gains from banks and Qantas offset by falls from energy, mining, and tech stocks.

Qantas shares surged by 8.7 per cent as the best performing stock in the index, after announcing profit guidance of A$1.2 to A$1.3 billion for the first half of financial year 2023.

This figure was more than double market expectations, and the airline cited strong travel demand, which has offset increased fuel prices, as the main contributor for the upgrade.

The company expects international capacity to return to 77 per cent of pre-Covid levels in the second half of the financial year, while domestic revenues are now higher than pre-Covid levels.

Australia's biggest health insurer Medibank went into a trading halt yesterday after it confirmed it had been the subject of a cyberattack.

Medibank is the latest victim in a string of corporate cyberattacks over the past few years and follows the highly-publicised Optus data breach last month.

In macro-economic news, NAB released its monthly retail spending report, observing a 1.1 per cent increase in September compared to the month before. However, the bank noted this was likely due to the impacts of inflation on higher retail prices.

New Zealand

The NZX 50 fell by another 0.5 per cent yesterday, failing to pick up momentum as most sectors traded down.

Heartland Bank provided an update on its financial year 2023 profit outlook, reiterating an expected $109 to $114 million profit range but flagging the possibility that its profit might be hit by movements in several of its hedging positions.

Shares in Heartland finished flat for the day.

Air New Zealand gained 2.5 per cent after the positive readthrough from Qantas' trading update.

Air New Zealand had previously upgraded its profit guidance just under a month ago, noting strong forward sales over the first three months of the financial year.

Coming up today

Electricity retailer Genesis Energy will be holding its annual shareholder meeting today and may provide new information to the market on its trading conditions. In the US, retail sales numbers will be released overnight.

• For more information on the latest market moves, get in touch with Jarden.

All market pricing and announcements are sourced from Refinitiv, NZX and ASX.

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