Jarden Brief: US unemployment claims fall to lowest level since start of pandemic

Unemployment claims dropped to below 300,000. Photo / Getty Images

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

New Zealand

The NZX 50 was relatively flat yesterday, up a slim 0.1 per cent.

Utilities rose 1.4 per cent and industrials increased by 0.6 per cent.

Fisher & Paykel Healthcare declined 1.9 per cent, leading the healthcare sector downwards. The healthcare corporation continued a volatile week and is down 8.2 per cent year to date.

Healthcare declined 0.7 per cent, and consumer non-cyclicals fell 0.5 per cent on the back of a 2.6 per cent decline from The a2 Milk Company, which has experienced volatility in its stock price over the last couple of weeks.

Meridian Energy announced this week that its NZ retail sales volumes in September 2021 were 8.8 per cent higher compared to September 2020. This news was favourably received by investors, pushing the Meridian Energy stock price up 3.5 per cent.

Fonterra Shareholders' Fund increased 2.1 per cent recovering from Wednesday's dip related to the 2.9 per cent decline in volume at the Global Dairy Trade auction. Fonterra has recently established a target to increase revenues in the high value foodservice channel. The dairy cooperative, the largest of its kind in the world, aims to increase the proportion of milk solids in the out-of-home sector by 50 per cent to a target $5 billion in revenue from this channel by 2030.

Meanwhile, Eroad dropped 7.4 per cent following a downgrade of its 2022 organic revenue growth. The company now expects to grow revenue (excluding its Coretex acquisition) by 10 to 13 per cent, down from its prior guidance of 13 to 32 per cent growth. The company cited challenging macro conditions and Covid-19 related delays, especially in North America.

Kiwifruit exporter Seeka, however, upgraded its profit guidance from $14.8 million to $16 million at the mid-point. The stock traded flat.

International
US

US equities were mixed at the time of writing as the S&P 500 remains roughly unchanged, the Nasdaq was higher by 0.4 per cent, and Dow Jones Industrial Average lost 0.3 per cent, despite touching its record high in the early hours of trading.

US unemployment insurance claims were posted for the week ended 16 October and seemed to read well, with claims falling below 300,000 for the first time since the start of the Covid-19 pandemic.

Outperforming sectors include consumer cyclicals and real estate which made gains of 1.0 and 0.1 per cent, respectively.

Sector gains were buoyed by an impressive performance from dating app company Match Group, which owns the likes of Tinder, Match, Hinge, alongside additional apps in its portfolio. Match received a series of broker upgrades throughout the week, and it was also revealed that a bulge bracket bank had been buying shares in the company.

Computer software company Hewlett-Packard announced its fiscal FY22 outlook yesterday. Investors reacted favourably to news of a dividend increase, and upgraded earnings per share estimates from US$4.07 to US$4.27.

In contrast, downward pressure on indices were drawn from sector losses in energy (down 1.8 per cent) and materials (down 0.9 per cent).

Large-cap computer and business software company International Business Machine (IBM) was the largest decliner as it slumped to an 8.6 per cent loss at the time of writing. IBM missed third quarter headline and revenue numbers, and did not provide further confidence in its future earnings growth.

Joining IBM, with a relatively high decline, was energy infrastructure company Kinder Morgan. It was also a casualty of an unexpected third quarterly earnings miss, down 6.1 per cent.

Rest of the world

Asian indices were again mixed overnight. Highlights include the Hang Seng and Nikkei losing 0.5 and 1.9 per cent, respectively, while the Shanghai Composite nudged forward by 0.2 per cent. China's Evergrande Group, the property giant responsible for some of the international market volatility over the last few weeks, fell 8.1 per cent after it returned to trading following a two-week halt.

Commodities

In commodities this morning, gold is trading weaker by 0.2 per cent at US$1,780.6 per ounce. WTI crude oil fell back from its multi-year high yesterday, down 2.0 per cent in the last 24 hours to now trade at US$81.70 per barrel.

Treasury yields are also trading continued a solid run for the week, trading higher after yesterday's US jobless claims data, with the 10-year now priced at 1.67 per cent.

Crypto's fell back to ease some of the momentum after a stellar week. Over the last 24-hour period, Bitcoin has lost 5.2 per cent to US$62,905.90 while Ethereum was down 0.7 per cent, now trading at US$4,080.20.

Australia

The ASX 200 ended Thursday's session flat with a mixed performance from constituent sectors.

A-REIT was the best performing sector, gaining 1.7 per cent, followed by information technology, up 0.6 per cent. On the flipside, energy (-1.4 per cent) and consumer staples (-1.1 per cent) underperformed.

Fund manager Perpetual rallied 7.8 per cent as the market reacted favourably to its first quarter 2022 business update. The firm reported growth across all four divisions. Total assets under management grew by 2.7 per cent on the prior period to A$101 billion.

Construction and engineering services firm CIMIC Group's shares jumped 5.9 per cent after sharing its financial results for the nine months to 30 September 2021. Group revenue (revenue including that of joint ventures and associates) grew by 9.2 per cent year on year to A$10.9 billion.

Medical services provider Healius also performed well on the back of its first quarter 2022 trading update at its 2021 AGM, rising 4.4 per cent. Covid-19 testing revenue drove the group revenue in the first quarter of 2022 financial year, resulting in 44 per cent growth. Healius, recorded first quarter operating earnings of A$202 million – which was more than what consensus estimates expected them to earn for the entire half year.

The largest decline of the day was from Flight Centre Travel Group, continuing its downward trend from the previous session and dropping 5.8 per cent. The travel agency successfully priced A$400 million convertible notes due in 2028 yesterday.

Super Retail Group decreased by 4.4 per cent a day after its AGM and latest trading update.

Rounding out the top decliners was mining technology producer Codan (-3.2 per cent), reversing some of the gains made on Wednesday.

• 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 available at: https://www.jarden.co.nz/limitations-and-disclaimera>