Keeping you up to date with the latest market moves, in association with Investment firm Jarden
NZX market wrap
The NZX 50 ended up 0.4 per cent as travel software company Serko led the way, rallying 5.9 per cent. The Government's pre-election economic and fiscal update, which highlighted a smaller dip but slower recovery than previously expected, did not seem to have a noticeable effect on the market as a whole.
Spark, in announcing its three-year strategy, noted a continued investment into 5G rollout and building unconstrained capacity in wireless broadband. It advised its new strategy will focus on developing the established wireless, broadband and cloud businesses, as well as on growing new businesses in internet of things, digital health and sport. Competition looks set to grow for Spark however, as Sky TV looks to enter the broadband market. This will be a key threat to dividend growth.
Auckland Airport's stock price was largely unchanged after its monthly traffic update reported total passenger volumes down 85.1 per cent compared to August last year. Auckland's second lockdown and travel restrictions bore heavily on the company's previously recovering domestic passenger count, with numbers 51.8 per cent lower than July. Jetstar suspending all domestic services from August 19 was a second hit, although the second-largest New Zealand airline will be resuming flights as of today.
Meridian's August update showed generation down 18 per cent compared to last year, it was up against an abnormally high August 2019 period. However, the retail trend continues to be positive as volume was up 7 per cent.
NZX-listed Heartland Bank is set to report their full year results today. The stock has fallen by more than 50 per cent since the start of the year during the large market drop caused by Covid-19 and has yet to fully recover. Analyst consensus has predicted the bank to report a profit of $66.5 million this year, or 11.7 cents per share.
There was also more connected-person buying in Sky TV, with director Susan Paterson buying 125,000 shares on market for $18,750.
Chinese markets slid, for their first decline of the week, despite a lack of any new economic news out today. The Shanghai and Shenzhen fell 0.4 per cent and 1 per cent, respectively. The US markets had a mixed bag with many sectors being pushed up in anticipation of the Fed announcement this morning, however, tech saw an early sell-off before recovering some of the gains.
The US markets have had a turbulent day, with them all jumping on the announcement of the Fed before faltering lower. At the time of writing, the Dow Jones was up 0.3 per cent, while the S&P 500 is down 0.1 per cent and the Nasdaq 0.8 per cent.
US retail sales showed signs of slowing in August because of the unemployment benefits being cut to all Americans. Core retail sales were down 0.1 per cent, and overall retail sales increased 0.6 per cent with high gasoline prices being a main catalyst.
The Fed announced that it will keep rates low for years to come, sending sharemarkets higher. As a result, it is likely that investor sentiment will remain optimistic about the sharemarket.
Yelp data showed that in America more than 18,000 businesses remain closed, and close to 98,000 say they will remain closed permanently.
Reports by the House Transportation and Infrastructure Committee found that fatal crashes of Boeing aeroplanes were due to significant errors and the sweeping failures of company engineers. It was said it was not due to one singular failure or a technical mistake but a culmination of a series of faulty technical assumptions and pressure from management to update the 737's design swiftly and inexpensively. Despite this, Boeing's share price pushed higher, up 3.5 per cent at the time of writing.
The most talked about IPO of sometime did not disappoint today, with Snowflake more than doubling on open. The initial IPO price was at the higher end of the range at US$120 per share. On open this morning, this shot up to US$250 and then further to nearly US$300, before settling at the time of writing at US$262 per share. JFrog Ltd also had their IPO today with the share price up close to 51 per cent, at the time of writing.
The WTI oil price soared, passing US$40 for the first time in two weeks, as US crude inventories fall. The gold price continues to rise today, moving another 0.1 per cent to US$1968 per ounce. The US 10-year treasury yield is flat at 0.68 per cent.
ASX market wrap
The ASX 200 finished the day up 1.0 per cent amid positive tech performance overnight Tuesday and in anticipation of the announcement following the Federal Open Market Committee meeting this morning.
All peer indices were also up. The rotation towards smaller stocks continued today with the ASX Small Ordinaries and the ASX Midcap 50 up 1.6 per cent and the ASX All Ordinaries up 1.1 per cent. The ASX 50, by comparison, was only up 0.9 per cent. Only time will tell, if there is a durable rotation caused by a change in institutional investors' strategies.
Returning to the ASX 200, all sectors were up on the day, with industrials and technology rising 2.1 and 1.6 per cent, respectively. The utilities sector underperformed, only up 0.1 per cent.
Job listings company, Seek, was the best performer on the day, gaining 9.4 per cent. The company announced that it was in talks with "a number of parties" over whether to bring new investors into its Chinese unit. The announcement came amid speculation that Alibaba was considering an investment, with Asia billed as the next growth frontier by Seek.
Tech stocks rallied throughout the day on the back of positive tech performance overnight. Financial services tech provider, Netwealth, finished up 5.4 per cent. Payments solutions company, EML Payments, was up 6.3 per cent. Location intelligence company, Nearmap, was up 5.1 per cent. Afterpay, the largest name in the buy now, pay later sector was up 4.0 per cent. The smaller BNPL players also rose.
Coal producers, Whitehaven Coal and New Hope Corporation, ended their buoyant runs, down 5.2 and 2.7 per cent, respectively. Coal prices were up marginally overnight but the gains were insufficient to sustain the surge. Some of the gold-exposed stocks that have recently performed positively were down marginally. Resolute Mining, Saracen and St Barbara fell 1.0 per cent, 1.3 per cent and 1.2 per cent, respectively.
Alongside Heartland Bank's earnings results, New Zealand releases its second quarter GDP results today, meanwhile Australian employment data is due to be reported.
In the US, weekly jobless claim data is out tomorrow, along with housing starts and building permits, which will give further update on the economic recovery for the country.
• 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 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.
Full disclaimer available here: www.jarden.co.nz/limitations-and-disclaimer