Jarden Brief: Tech giants to report earnings this week

Keeping you up to date with the latest market moves, in association with Investment firm Jarden

New Zealand

The NZX 50 was in the red, falling by 0.5 per cent yesterday. This fall was led by consumer non-cyclicals, down 2.7 per cent, and healthcare, down 0.8 per cent. On the flip side, the only two gaining sectors were real estate and utilities, up 0.4 and 0.2 per cent, respectively.

The Fonterra Shareholders’ Fund was the top performer of the NZX 50 yesterday, rising 1.9 per cent. Skellerup Holdings and Sanford gained 1.8 and 1.4 per cent respectively, both continuing to rise from last week.

A2 Milk slumped 6.4 per cent. Last week the Commonwealth Bank of Australia sold a portion of its a2 Milk holding, ceasing to have a substantial holding in reducing ownership from 5.015 per cent to 4.971 per cent. In other news, Amanda Hart was announced as the new chief people and culture officer.

SkyCity Entertainment Group fell by 2.5 per cent. Fletcher Construction released an update on the NZ International Convention Centre repairs following the 2019 fire. 80 per cent of the work has been completed with window art works being removed, allowing the protective coating on the structural steel to be stripped and reapplied.

Stats NZ trade data was released yesterday. New Zealand exports reached a new high, rising 17 per cent (+$871 million to almost $6 billion) in June fueled by record export values for beef and logs. However, while exports increased, imports increased even more, which saw the June trade surplus decline. For the full year to June 2021, there is a $252 million trade deficit, meaning that imports have exceeded exports in this 12-month period.

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United States

After finishing strong and setting new records at the end of last week, the major US indices continued to creep up. The S&P 500 rose 0.1 per cent and the DJIA was up 0.2 per cent, but the NASDAQ declined slightly, down 0.1 per cent.

Investors are awaiting the earnings reports of companies, set to be released this week, from the likes of Alphabet, Microsoft, Apple, Facebook, and Amazon. Tesla will report its earnings first, after the markets close today.

The strongest sector performances at the time of writing included a 2.1 per cent increase from energy stocks and a 0.8 per cent increase from materials. Healthcare and real estate underperformed, decreasing 0.6 and 0.4 per cent, respectively.

Hasbro was making the biggest gains of the day, jumping 12.6 per cent. The toymaker reported its earnings before market open, and the market responded favourably by setting a new 52-week high.

Next in line was insurance company Aon, up 8.5 per cent.

Rounding out the top performers of the session, was PerkinElmer, up 4.7 per cent. The diagnostics and life science research company also set a one-year high.

The tail end of performers constituted insurance company Willis Towers Watson, decreasing 9.1 per cent. On Monday, Aon and Wallis called off a US$30 billion merger due to objections by the US regulator. The merger would have created the world’s largest insurance brokers leading to monopoly concerns.

Twitter decreased 5.0 per cent, followed by biotechnology company and vaccine manufacturer, Moderna, which started off strong, setting a new 52-week high at US$360 a share but then declined 3.3 per cent.

Rest of the world:

The major Asian indices plummeted last night, with the Hang Seng dropping a significant 4.1 per cent, wiping out all the gains it has made in 2021. The Shanghai index decreased by 2.3 per cent and the Shenzhen closed 2.7 per cent lower.

China’s crackdown on its tech giants and new restrictions in the education sector were most likely driving these losses. Moreover, China and the US held a high-level meeting on Monday, which ended in a ‘stalemate’ and left investors cautious.

The Nikkei performed well on the other hand, rising 1.0 per cent, resuming trading after two public holidays.

Commodities:

Gold was trading 0.2 per cent lower at US$1,797.80 per ounce.

Oil slightly decreased by 0.1 per cent to US$72.00 per barrel.

Cryptocurrencies rallied across the board, with Bitcoin jumping up 15.0 per cent, sitting just below the US$40,000 mark at the time of writing. Ethereum climbed up 9.7 per cent. The entire cryptocurrency market added more than US$100 billion in value in 24 hours.
The 10-year US treasury rate edged slightly lower, yielding 1.271 per cent.

Australia

The ASX 200 was close to flat on the day, trading down 10 basis points to finish at 7394.3.

The index was supported by basic materials, which meaningfully outperformed the other ASX sectors, up 1.3 per cent. Consumer cyclicals was the only other sector in the green, up 0.2 per cent.

Rare earths miner and processor Lynas Rare Earths was the best performer on the day, trading up 10.6 per cent. The company reported record fourth-quarter production figures, with 3,778 tonnes of rare earth oxides (up from 2,579 tonnes quarter on quarter) and 1393 tonnes of neodymium and praseodymium (up from 775 tonnes quarter on quarter) produced. Quarterly sales revenue, up almost 500 per cent to A$185.9 million, was supported by rising global demand for non-Chinese rare earths.

Marketplace operator Redbubble was the next best performer on the day, up 5.9 per cent. The company announced the appointment of Nicole Borlan, previously of Xero and Seek, as Chief Product Officer. They also announced the appointment of Stacey Wallace, previously director of supply chains at Amazon, as Chief Supply Chain Officer.

The worst performing sectors on the day were academic & educational services and energy, respectively down 2.7 and 1.4 per cent.

Gold producer and explorer Silver Lake Resources was the worst performer on the day, down 8.1 per cent. The company announced its quarterly production of 62,126 ounces of gold, which was down 12.0 per cent quarter on quarter.

Embattled resort and casino operator Crown Resorts was the next worst performer on the day, down 5.2 per cent. The Royal Commission into the company’s Perth operations will be extended from November 2021 through to March 2022.

Australian house prices are booming. NAB has raised its growth forecast for Sydney home prices by more than 7 percentage points to 21.6 per cent this year but reduced predicted gains in 2022 by about half to 3.1 per cent, as affordability worsens and the boost from lower interest rates starts to fade. The bank also upgraded its dwelling price expectations across the other capitals, with Melbourne home prices now projected to grow by 17.6 per cent.

• For more information on the latest market moves, get in touch with Jarden.

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-disclaimera>

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