Keeping you up to date with the latest market moves, in association with Investment firm Jarden
New Zealand
NZX market wrap
Sky Television seems to have continued interest ahead of its results release date tomorrow, with the stock price rising 9.5 per cent and more than 15.7 million shares traded.
Chorus was the runner up for biggest gainer of the index, rising 5.2 per cent after a strong Australian market open.
SkyCity also continued to rise, up another 3.9 per cent to come close to reclaiming the $3 mark.
Investors may have been interested in seeing announcements that Michael Hill director Rob Fyfe purchased 500,000 shares in the company for $192.5k, and Chorus director Prudence Flacks had purchased 4650 shares in Chorus for $39.3k.
Meanwhile, market reaction to Restaurant Brands' first half result seemed muted, with trading volumes light. The stock price edged up 0.8 per cent. Restaurant Brands' posted an underlying npat (post-IFRS 16) of $13.3m, which although down 37.6 per cent on the previous year was broadly expected given the impacts of Covid-19.
AFT Pharmaceutical's CEO was reported saying in the company's annual shareholders' meeting that hand sanitiser products had had "good sales" and hinted at "exciting data" from research into more Covid-related products.
Silence around Air New Zealand capital raise creates further speculation
Media outlets mused the prospect of the Government planning to take a larger stake in Air New Zealand, with aviation adviser David Mackenzie highlighting that the silence around a capital raise could be reason for speculation.
Also released yesterday morning, the airline's July update showed passenger kilometres for the first month of their new financial year were down -86.8 per cent from last year. As expected, passengers from international flights continued to be dismal although domestic passengers count was only a third less than July last year.
Briscoes increases dividend, holds profit steady during first half of 2020
Briscoes Group posted a first half profit of $28 million, which was slightly lower than the corresponding months last year.
Revenue was reported at $292.4m (-3.5 per cent) after a recessive first half (-35.6 per cent in sales) was bolstered by a strong rebound in the second quarter (+28.2 per cent).
Online sales performed especially well; doubling compared to the same period last year.
Investors may also have been pleased to see an interim dividend of 9cps, an increase from last year's first half pay-out.
International
Chinese markets recovered some of yesterday's losses, despite Trump announcing he will punish American companies who create jobs overseas and forbids them doing business in China from winning federal contracts. This was largely ignored with the Shanghai and Shenzhen markets rising 0.7 and 0.1 per cent, respectively.
US markets began the week where they left off on Friday, with another huge tech sell off, causing the VIX index to rise past 30 once again because of heightened volatility. At the time of writing, the Dow Jones had lost another 2.4 per cent, S&P 500 had lost 2.8 per cent, and the tech heavy Nasdaq was down 3.9 per cent.
All sectors were in the red today, with energy (-3.8 per cent) and technology (-4.3 per cent) the biggest laggards. Since Thursday, the Dow Jones has lost 5 per cent, S&P 500 has lost 6.5 per cent and Nasdaq has lost 9 per cent. Sell-offs of this nature have not been seen since March. Further concerns are being fuelled by the increase of the VIX above 30, which may demonstrate that further large market corrections could occur.
Brent Crude Oil is suffering yet again with markets moving into contango, where immediate prices are below those for contracts for supply in the future. The discount is once again large enough that many traders could hire containers and store them to sell at a profit later, which will hurt Saudi Arabian and Russian demand.
Because Covid-19 is still having a major effect on international travel, oil demand is still below 90 per cent of pre Covid-19, which has led to the continued over-supply in the oil market.
The tension between China and the US has increased once again with Trump intending to curb the economic relationship between the pair, if he wins the re-election, stating they will manufacture in America instead to create jobs.
He believes that prohibiting federal contracts from companies that outsource to China is a necessary strategy, saying China needs to be held accountable for the spread of the virus.
He does not want China using America's money to build a stronger military. The decoupling of these powerhouses can cause huge volatility in the market, demonstrated through the last quarter of 2018.
Nikola Motors share price jumps close to 50 per cent on the news that General Motors will take an 11 per cent stake in the company and help produce the hydrogen fuel cell for the Badger truck by 2022. At the time of writing the stock ended up 43 per cent, to US$50 per share.
Commodities
WTI Oil had its largest one-day drop since March, dropping 6.8 per cent to US$37 a barrel. The gold price feared slightly better, rising 0.25 per cent to US$1940 per ounce. Due to the sell-off of equities and enhanced volatility the US 10-year Treasury yield dropped 4 basis points to 0.68 per cent.
Australia
ASX market wrap-up
The ASX 200 finished the day up 1.1 per cent. Peer index performance improved with weighting towards larger firms. The ASX 20 rose 1.3 per cent while the ASX small ordinaries only lifted 0.3 per cent.
Sentiment was boosted by reports that banks would be required to take on more government debt to aid stimulus measures and combat economic damage. Additionally, the US market was closed overnight because of their Labour Day holiday. The trend of Australian tech sector selloffs in sympathy with similar overnight selloffs was thus interrupted. It will be interesting to see if a similar trend continues in today's trading.
Energy and financials were the best performing sectors on the day, rising 1.7 and 1.3 per cent, respectively. Consumer non-cyclicals and utilities were the worst performing sectors on the day, both flat.
Metal recycler Sims Metal Management was the best performer on the day, up 7.8 per cent.
Several travel-exposed stocks posted gains yesterday as investors continued to grow more positive about border reopenings and vaccine development. Webjet was up 7.7 per cent, Qantas Airways rose 4.3 per cent and Flight Centre rose 3.6 per cent. Sydney Airport bucked the trend, falling 2.8 per cent.
Mining services provider Perenti Global jumped 7.1 per cent on news of an AU$200m contract award. This comes after it was down yesterday on news of a debt issue.
The worst performing company in the market was electronics retailer, JB Hi-Fi declining 2.8 per cent.
Several miners were down on falling commodity prices overnight. Lithium exposed Mineral Resources Ltd and Orocobre were down 2.8 and 1.8 per cent, respectively. Gold-exposed St Barbara, Perseus Mining and Gold Road Resources declined 2.4, 2.2 and 1.9 per cent.
Upcoming events
New Zealand
ANZ is to release its updated "Truckometer" report at 10am today. The bank will also release business confidence figures.
International
Economic data to be released include US job openings and EU interest rates.
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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