Workers in a "clean room" at an Intel chip-manufacturing plant in Oregon. The semiconductor industry has become a geopolitical battleground for the US and China. Photo / Philip Cheung, The New York Times
Keeping you up to date with the latest market moves, in association with Investment firm Jarden.
International
US
Stocks nudged forward ahead of the Federal Open Market Committee’s (FOMC) decision, where interest rates were lifted by 50 basis points, taking the overnight borrowing range to 4.25-4.5 per cent, its highest level in 15 years.
Healthcare company Moderna (known for being a Covid-19 vaccine producer) kicked on after yesterday’s momentum to make 7.9 per cent at the time of writing (+22.4 per cent the previous day) following the release of promising study results involving its new melanoma cancer vaccine.
Other top performers before the FOMC release included Generac Holdings (+4.1 per cent) and Solaredge Technologies Inc (+3.1 per cent)
The single stock laggard for the morning was infrastructure company Charter Communications, which received a multitude of broker downgrades following announcement of its intention to spent over US$5.5 billion on a nationwide internet spectrum upgrade.
Rest of the World
Similar to the CPI data out of the US on Wednesday, the UK also published its own lighter-than-expected inflation number for the month of November, coming in at an increase of 0.4 per cent compared to the polled 0.6 per cent.
On an annualised basis, this moves them off a 41 year high of 11.1 per cent, now sitting at 10.7 per cent.
Breaking down the headline figure, electricity, gas and other fuels plus food and non-alcoholic beverages were the largest contributors to the increase.
Conversely, transport was the main detractor. The Bank of England will announce its policy rate move on Friday (NZT), with a 50-basis point hike widely expected.
Reports out of China claimed Beijing is working towards approving a 1 trillion yuan (US$143bn) support package for its semiconductor industry, which has been a key geopolitical talking point for the country following President Joe Biden enacting a similar support package in the US in August, aimed at creating further manufacturing independence.
China’s tech stocks Tencent and Meituan reacted positively to the news, at +2.1 per cent each by the close, similarly EV maker Li Auto (listed on the Nasdaq) rose 0.6 per cent at the time of writing.
Commodities
Oil continued to push above the US$80 mark with Brent Crude now trading at US$82.8 amidst the International Energy Agency (IEA) raising its energy demand forecast congruent with easing inflationary pressures and lifting GDP outlook.
Back-to-back lighter than expected inflation readings across two of the larger world economies spurred Bitcoin (+2.0 per cent) to its highest level in a month. Its counterpart Ethereum also found gains of 1.5 per cent at the time of writing.
Lastly, gold held mostly unchanged at US$1,820.
New Zealand
The NZX 50 slid a meagre 0.1 per cent to land on 11,585 points at the close of Wednesday’s trading.
Early in the day, Contact Energy (-0.8 per cent) published their operating report for November with operating earnings of $40.6 million, down on the 2021 previous corresponding period of $47.4 million, while the 5-month financial year to date figure was also 23 per cent lower than 2021.
The company cited lower total generation volume and softness in wholesale electricity prices as reasons for the weaker result.
In other news, the Government yesterday extended the current fuel tax and public transport price cuts until March 2023, meaning there will still be a 25 cent cut on fuel tax and half price public transport until that date.
Afterward, only community service card holders will be able to access half price public transport, with Deputy Prime Minister Grant Robertson commenting “it is not sustainable to continue to subsidise the cost of petrol indefinitely for everyone,” citing over $1 billion invested on the schemes over the past year.
Statistics NZ data reported New Zealand’s current account deficit had again increased, now totalling $29.7 billion, $13.3 billion wider than the deficit this time last year.
Australia
The ASX 50 moved 0.7 per cent higher, buoyed by the industrials and energy sectors, which made 3.1 and 1.5 per cent for the day.
Markets may have reacted to job vacancy data out late afternoon, which saw vacancies increasing 4.7 per cent to just shy of 500,000, holding at record levels having increased from a stable 200,000 prior to the Covid-19 pandemic.
Gold miner St Barbara jumped 13.8 per cent after it was announced that its acquisition target, Genesis Minerals, had completed a capital raise which is expected to help support merger and transaction costs related to the now complete deal.
In summary, St Barbara will purchase Genesis for just over A$540 million, creating a much larger mid-tier miner within the Australian mineral’s scene. As expected, shares in Genesis Minerals rose to reflect the merger price, up 12.6 per cent on the day to close at A$1.35.
The other top performers on the day were Block Inc and Chalice Mining, lifting 8.2 and 6.4 per cent respectively.
Alternatively, after a strong trading update and a 6.9 per cent improvement yesterday, Bendigo and Adelaide Bank lost 3.3 per cent to finish as the day’s third worst performer along with Imugene Ltd and Endeavour Group.
Lastly, union membership numbers have fallen to a new low, now sitting at 12.5 per cent of Australian employees (down from 14.3 per cent in 2020). This broke the trend of membership plateauing through Covid-19, as workers sought greater bargaining power and job protection throughout the pandemic.
Coming up this week
Australia unemployment data will be released today along with New Zealand’s third quarter GDP. On Friday, expect Eurozone CPI along with a raft of other economic data including Eurozone trade balance, UK retail sales and New Zealand’s manufacturing PMI.
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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