Keeping you up to date with the latest market moves, in association with Investment firm Jarden
NZX market wrap
SkyCity's September rally seemed to halt yesterday, after it led the index down by dropping 4.3 per cent.
Serko announced that acting chairwoman Claudia Batten, will become permanent in her position with Simon Botherway to move to a pure independent director role. The company also advised to plans to search for a further independent director.
Air New Zealand reported record sales of 110,000 flights yesterday, after its 180,000 cheap flights promotion. This compared to the usual 31,000 seats booked per day in pre-Covid times.
Heartland Bank announced plans to expand its reverse-mortgage offering, after it secured a long-term A$142 million loan funded by offshore institutional investors. According to Heartland, the transaction should allow it to increase its access to committed Australian reverse mortgage loan funding to A$1 billion, as well as to meet greater European solvency requirements.
Market abuzz after EROAD placed into halt
Eyes may be on NZX-listed logistics specialist EROAD today, which was placed into halt with no release from the company.
The halt followed rumours of a $25 million proposed share placement to coincide with an ASX listing, which the company teased in October last year. Late August, the firm had applied for a foreign exempt listing and shares have risen by 15.4 per cent since then.
Investors have seemed to like the idea of a dual listing, which should provide the company with greater access to capital and align its investor base with its operations, given its Australian business.
Chinese markets rallied further overnight with signs of economic recovery, as Chinese retail sales grew for the first time in 2020 and industrial production expanded record numbers for a fifth straight month. Investors reacted positively to this, as the Shanghai and Shenzhen indices rose 0.5 per cent and 1 per cent, respectively.
The U.S markets all began strongly in morning trading, however, have since retracked going into the close. At the time of writing, the Dow Jones was now flat, the S&P 500 was up 0.5 per cent, while the Nasdaq was up just over 1.2 per cent. All sectors were initially in the green excluding financials; however, this now also includes consumer staples, and energy.
The World Trade Organisation (WTO), with a panel of three trade experts, has concluded the US broke global regulations amid the imposed tariffs set on China in 2018. They believe the US did not meet its burden, of demonstrating that the measures were provisionally justified. The Chinese believe that the recourse meant they were not treated like all other WTO members and that the US should have first sought remedies through the WTO instead of retaliating. Despite this, nothing is likely to happen in the short term with the WTO expecting Washington to dispute this claim until void.
UK employment data shows headline unemployment rose to 4.1 per cent for the first time since 2018, with over 750,000 jobs lost since March. However, furlough workers are not included in the data suggesting it may understate reality.
Many believe the Fed will stay on hold until 2023 for rate hikes, in response to last month's announcement around their new inflation target. Respondents believe they will allow for inflation to overshoot to approximately 3.2 per cent for up to 1 year before rates are increased. This flexible arrangement is likely to give further fuel to the share market with interest rate expectations remaining low.
Apple announced the launch of new products today with an Apple Watch Series 6, eighth generation iPad, Apple One and Fitness+ workout services, among the headlines alongside iOS 14. No new iPhones were announced, which are likely to come later in the year. Apple One is to include a range of services with one individual package, which included Apple Music, Apple TV+, Apple Arcade and iCloud storage, for US$14.95 per month.
WTI Oil recovers some of the losses over the past week despite further reports of bleak worldwide demand for oil over the next year. At the time of writing, it was up 2.7 per cent to US$38.40 a barrel. Gold was relatively flat today but slightly down from yesterday's announcement at US$1961 per ounce. The US 10-year yield remains at 0.68 per cent despite the sell-off of USD overnight, which previously caused a small rise.
A strong Global Dairy Trade auction overnight recorded a 3.6 per cent gain. Again, Southeast Asia and north Asia accounted for a majority of the purchases with this auction falling in the midst of the tariff free window for powders bound for China. Whole milk powder secured a 3.2 per cent gain.
ASX market wrap
The ASX 200 finished the day down 0.1 per cent, amid positive lockdown news out of South Australia.
In a loosening of lockdown restrictions, South Australia will open its borders with the Australian Capital Territory. Its borders with New South Wales will remain closed until Friday at the earliest. Prime Minister Scott Morrison has ruled out the possibility of raising taxes to fund Australia's economic recovery.
Continuing the trend of late, there was a notable rotation into smaller stocks yesterday. The ASX 200 and larger cap indices were all down on the day, the ASX All Ordinaries, Midcap 50 and Small Ordinaries Indices were all up. The Small Ordinaries Index rose 0.9 per cent.
Returning to the ASX 200, healthcare and industrials were the best sectors on the day, gaining 1.1 and 0.4 per cent, respectively. Telecommunications and energy were the worst-performing sectors, falling 1.7 and 1.6 per cent, respectively.
It was a strong day for miners and mining services. Gold and silver were up Monday night and continued to trade up through the day. Miners, Silver Lake Resources, Perseus Mining, Northern Star Resources, Gold Road Resources, St Barbara, Saracen and Resolute Mining all had significant gains yesterday. Mining services company, Perenti Global gained 4.6 per cent, driven also by its announcement of an A$140 million contract renewal, the third such announcement in seven days.
Dual-listed hotel and casino operator Sky City was the worst performer on the day, down 5.3 per cent.
Cleanaway Waste management continued its decline after reports criticising the chief executive. The stock was down 5.1 per cent.
Investore Property will go ex-dividend today - meaning investors who own the shares will be entitled to a dividend payout of 1.9 cents per share on September 24, next week. Spark NZ Investor Day is also on today in which their three-year strategy will be unveiled.
Economic news out of the US tomorrow includes: retail sales, NAHB Homebuilders Index and building inventories. All of these may demonstrate a further uptick in future inflation rates as consumers' ability to spend increases. It will also give insight into the recovery of the retail sector, which was one of the worst hit by Covid-19.
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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 Ltd 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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