Keeping you up to date with the latest market moves, in association with Investment firm Jarden
NZX Market Wrap
The market ended flat, following Aussie and US Futures, which were also flat at time of NZX close. Strong performances by Contact Energy (+5.5 per cent) and Sky Television (+6.9 per cent), both on relatively heavy volume were subdued by losses from heavyweights A2 Milk (-2.0 per cent) and Fisher & Paykel Healthcare (-1.4 per cent).
Research by NZ Post showed online shopping more than doubled (+105 per cent) year-on-year after the country moved into Alert Level 3. To date, online shopping continues to be elevated, up around 30 per cent compared to last month. Analysts speculate this may be an indication that the way New Zealanders shop has inherently changed going forward.
Strong growth for produce exporter
Fresh produce exporter & importer Turners & Growers Global posted strong growth figures in its first half of 2020. The stock price closed up 7.7 per cent after a hefty amount of market reaction. Revenue was up by 19.7 per cent to $671.3 million, and net profit after tax was $9.5 million, more than double the previous first half's figure.
The positive result from T&G is interesting to compare to Scales, who operates in a very similar fashion and had far less positive results out this week.
T&G credits its success to a decision to ship apples early in the season to Europe and the UK, bypassing the logistical issues omnipresent during the height of Covid-19. However, the hefty percentage increase pales when considering that the comparable period featured an extra-ordinary $7.1 million cost. This was incurred during reorganisation, including a replanting of orchards with premium varieties - the effect of which suppressed last year's profits.
Chinese markets had a mixed day with investors weighing up reports that China's growth is lopsided to services and industrial, which may hurt growth in the beginning of next year. The Shanghai markets were up 0.27 per cent and Shenzhen was down 0.7 per cent.
The US markets continued to rally with hopes of a stimulus package being decided today or tomorrow and initial jobless claims being substantially lower than estimations at 1.19 million versus 1.4 million expected. At the time of writing the Dow Jones was up 0.6 per cent, the S&P 500 was up 0.6 per cent and the Nasdaq was up 0.95 per cent. Facebook, Amazon, Apple, Netflix, and Google (colloquially referred to as the FAANGs) were all positive, Facebook led the way up 6.4 per cent.
The positive news was initial job claims were lower than expected. However, they are still well above historic levels and continuous claims are still around 31 million. In California, about 140,000 people had hours shortened or lost their jobs this week. Forecasts predict claims will increase in coming weeks as the Federal US$600 payment has expired and many turn to smaller state benefits. This may increase volatility as investors begin feeling the pain of the loss of payment, especially when lockdown measures have been heightened.
At the time of writing WTI Oil (-0.1 per cent) retreated slightly to US$42.17 a barrel. Gold continued its run on the news that interest rates remain low, closing in on US$2070 per ounce. The US 10-year treasury yield is flat on yesterday's figures at 0.54 per cent.
ASX Market Wrap
The ASX200 Index lifted 0.7 per cent, or 40.9 points, yesterday, fuelled by strong commodity prices. Materials lead the index, up 2.5 per cent. Large-cap stock BHP and other mining stocks rallied behind on buoyant iron ore prices and on the hope of a rebound in China's economy. BHP rose 4.9 per cent, also benefitting from a rising oil price. Rio Tinto, having gone ex-dividend yesterday – meaning investors buying the stock fall outside the rights window for the dividend – rose 1.5 per cent.
Of the large-caps, retail property owner, Scentre Group declined 2.3 per cent to A$1.92 amid warnings their property valuations will fall 10 per cent. Medical device firm, ResMed fell significantly, down 7.4 per cent to A$25.88 as ventilator demand appears to be reaching its peak. Although revenue rose, it was slightly lower than expectations.
ARB Corporation, Breville Group, Mineral Resources, Sonic Healthcare all hit 52-week highs in the market yesterday.
Origin Energy and global asset management firm Janus Henderson release their 2020 financial result to round out the week.
It is a big day of US economic data tomorrow, when non-farm payrolls, the unemployment rate, average hourly earnings, and consumer credit will be released.
Uber Technology is set to report today. It is up over 3.5 per cent as analysts anticipate good performance in the Uber eats business. The key metric will be how fast the Uber Eats business has grown compared to the decline in Uber car rides.
Ride-sharing has been hit hard by lockdowns, with safe distancing and staying at home, lowering the number of customers dramatically. The EPS expected is US$-0.78, and revenue is expected to be around US$2.1 billion.
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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 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