Keeping you up to date with the latest market moves, in association with Investment firm Jarden
NZX Market Wrap
The market was carried by another gain from Fisher & Paykel Healthcare, up 3.1 per cent. The largest company in the NZX is now up 22.8 per cent for the month, and 62.4 per cent for the year, after benefitting heavily from extra demand for its appliances because of Covid-19.
Gentailers were all green with Contact (+1.7 per cent), Trustpower (+2.7 per cent) and Mercury (+2.3 per cent) all making notable gains.
The main trio of energy stocks on the NZX also rose, with Refining NZ, Z Energy and NZ Oil & Gas up for the day.
Refining New Zealand advised of a $220 million non-cash impairment because of revised refining margin assumptions, reflecting excess refining capacity in the Asia-Pacific region as well as reduction in transport fuel demand, especially jet fuel.
Companies will record these impairments as expenses on their financial performance statements, indicating a revaluation of the company's assets. The effect of this is that profit numbers will be negatively affected. However, NZR traded up 1.4 per cent – indicating the market either does not consider this material, or that the write-down had been priced in.
Kiwifruit producer and exporter Seeka has advised it stands to benefit from the Covid-spurred depreciation law change. It will record a $5.5 million deferred tax credit on their performance for their 2020 financial year.
Goodman Property Trust (+1.5 per cent) announced a first quarter distribution of $0.01325 per share, excluding extra imputation credits.
Ryman Healthcare construction delays
Transtasman retirement home operator Ryman Healthcare says construction at its Nellie Melba, Burwood East, and Aberfeldie villages will be significantly affected by the new lockdown restrictions in Victoria.
However, Highton and Ocean Grove villages are outside metropolitan Melbourne and work will continue. Ryman was unable to advise on what effect this will have on its financial year but analysts may expect to see flow-on effects of the delays on the company's unit sales, which will in turn reduce its revenue. Shares traded down 2.3 per cent in response to the news.
Chinese markets were mixed with Shanghai up slightly by 0.11 per cent, and Shenzhen was down 0.75 per cent.
US markets have been bouncing between red and green, as investors weigh up the likelihood of a replacement stimulus package after the Federal US$600 relief package expired last week. At the time of writing the Dow Jones was up 0.33 per cent, the S&P 500 was up 0.06 per cent and the Nasdaq was down 0.1 per cent. In early trading, the S&P 500 was only 80 points away from its all-time high.
The Nasdaq continued to push above its records, being 1000 points above its pre Covid-19 levels, though it has since retreated.
Strong growth in US factory orders out today, up 6.2 per cent for June, came despite the wide spread of new cases. The non-durable goods (oil and textiles), also rose by 5 per cent, giving investors some hope that the economic recovery can continue despite record level of cases. Other positive news for the country was a surge in house prices, up 4.9 per cent in June. With the uncertainty around the unemployment benefit, homeowners may be reassured by their asset appreciation.
Large energy company BP severely missed expectations, posting a loss of UK£16.8 billion for the second quarter. Low demand and highly volatile future prices caused havoc for the company.
BP also had to slash dividends for the first time in 10 years, lowering it to UK£0.0525. Despite this news, BP shares jumped as much as 7 per cent on open, at the time of writing they still were up 3.36 per cent. The only explanatory fundamental catalyst was the new strategy they are pursuing to lower carbon emissions and slightly better than expected oil demand later in the quarter.
WTI Oil has had another massive day, up 1.5 per cent, to be sitting just under US$41.80 per barrel. This is the highest level since March 3.
Gold broke the US$2000 mark and continues soaring throughout the day, at the time of writing up 2 per cent to be sitting at US$2020 per ounce. The gold price continues to rally on the back of the US 10-year treasury yield decline, a weakening US dollar and uncertainty around the fiscal stimulus package. The US 10-year yield is now sitting at a low 0.51 per cent. With many stocks this year gaining on a momentum strategy, it now looks like gold has benefited, with inflows for Gold ETFS reaching record numbers, worth over US$40 billion for the first half.
ASX Market Wrap
The S&P/ASX 200 rallied above 6000 points again yesterday as it rose strongly early in the day. All sectors were in the green yesterday with technology and energy leading the gains, rising 3.2 and 2.6 per cent respectively. The banks also recovered well from the previous day, with CBA advancing 2.3 per cent to A$71.50. Biopharmaceutical company Mesoblast climbed 7 per cent to A$4.12, as did gaming firm, Aristocrat Leisure, jumping to A$27.60.
Retail developer, Unibail-Rodamco-Westfield was the biggest laggard, losing 3.1 per cent, while Evolution Mining dipped 2.8 per cent to A$5.90.
Another strong performer was Afterpay, clawing back above A$70 to close at A$70.80, gaining 6.5 per cent. Scentre Group and Suncorp also had solid days, rising 5.0 and 4.2 per cent respectively. Of the Top 20 stocks, Goodman Group reached its 52-week high closing the day at A$17.16.
The Australian cash target rate was unchanged yesterday at 0.25 per cent. The RBA announced that it will purchase Australian Government Securities in the secondary market from today, to ensure the yield remains consistent with the target of 0.25 per cent. The three-year bond yield reacted sharply to the announcement and dipped towards its target of about 0.25 per cent. The RBA also noted that current Victorian lockdowns could push the unemployment rate to 10 per cent this year.
Home loan data is released today. Centuria Industrial REIT and Centuria Office REIT FY Earnings are also out today.
Economic data out in the US tomorrow is Market services PMI's, ISM nonmanufacturing index, ADP employment report and the Trade deficit.
Some of the US companies to report tomorrow are Ascent Capital Group Inc, Fastly Inc, Square Inc, Moderna Inc and Resmed Inc.
For more information on the latest market moves, get in touch with Jarden .
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.
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- NZ Herald