Keeping you up to date with the latest market moves, in association with Investment firm Jarden
New Zealand
The NZX50 was down marginally on the day, falling 0.11 per cent. Medical Technology giant Fisher and Paykel Healthcare (up 2.9 per cent) did a lion's share of the work keeping the index afloat. Due to Fisher and Paykel's higher constituent weighting in the NZX50 it was able to keep the index close to flat when the majority of companies declined. Fletcher Building also had a good day, up 2.7 per cent.
Metro Performance Glass was the worst performer in the index, down 5.3 per cent. Banking company Heartland Group Holdings also had a bad day, down 5.2 per cent, with investors likely having Westpac's result on their mind.
ANZ's Chief Executive Antonia Watson has said that Dairy has been one of the star industries in the immediate aftermath of Covid-19. Industry members have taken advantage of high commodity prices to pay down debt obligations. There has been a premium paid for industries and businesses with strong balance sheet positions since March. Investors should consider how this may change when recovery becomes more certain. One of the main reasons for the decline in A2 Milk has been the impact to the daigou distribution channel, which will lessen as international travel recovers. Commodity prices may be a headwind or a tailwind in such an environment.
International
US Markets:
US Markets started the week off strongly following what was the worst week since March, as anticipation of the US Election tomorrow heats up.
At the time of writing the Dow Jones was up 1.1 per cent, the S&P500 rising 0.6 per cent while the Nasdaq lagged, down 0.3 per cent.
The best-performing sectors are Energy (+3.6 per cent), and Materials (+2.7 per cent). While, the worst performing sectors are Technology (-0.3 per cent) and Consumer Discretionary (-0.6 per cent).
Rising Covid-19 cases in the US, with a record 99,321 cases on Friday, and the top five records in daily cases being set in five out of the last eight days indicate a nation walking a tightrope as the virus and uncertainty of the election have the potential to swing markets over the course of the week.
Meanwhile, Apple announced a new event for November 10, where it is expected to reveal new Mac books with Apple-designed chips instead of Intel. At the time of writing, Apple was down 1 per cent.
Asian markets:
The Shanghai was flat on the day, as the Nikkei and Shenzhen experienced robust gains, with both rising 1.4 per cent.
It was all about the manufacturing sector on Monday as factory activity rose to a near-record high in almost 10 years. IHS Markit's China Manufacturing Purchasing Managers Index (PMI) posted a reading of 53.6 for October, better than the 53.0 expected by analysts. The result was China's highest reading since January 2011, lifting global markets and investor sentiment.
China's October official PMI was 51.4, a small decline from the 51.5 recorded in September. However, readings over 50 signify expansion, as China registered its 8th month of growth.
Commodities:
At time of writing, Gold was up 0.7 per cent, trading at US$1893.1 per ounce. WTI Crude was up 0.6 per cent, trading at US$36.42 per barrel. The US ten-year treasury yield was down to 0.84 per cent.
Australia:
The benchmark Australian index edged higher yesterday, rising 0.4 per cent, albeit only a slight recovery after its worst weekly performance since April.
Utilities stocks outperformed on the day with the sector posting a 2 per cent increase, while building materials stocks CSR (+5.7 per cent), Boral (+5.5 per cent) and Adbri (+4.2 per cent) outperformed. Positive catalysts out for CSR noted the company will pay a higher dividend than expected. Financials were dragged down by Westpac, which fell 0.6 per cent after announcing a disappointing dividend of A$0.31.
The standout performer of the day was AMP, rising 9.8 per cent to A$1.68 after advising that a non-binding, indicative takeover proposal from Ares Management valued the company at A$6.4 billion, or $1.85 a share. Despite a history of delivering poor results for shareholders in previous transactions, market commentators note that AMP have performed well in this takeover. As a result, we have seen the stock price surge over 30 per cent since the news was leaked
In other news, ASX-listed job listing website Seek, closed down 0.8 per cent following its response to the negative report from US activist investment firm Blue Orca. The short report posted last week, alleged Seek was vastly overvalued, and that its Chinese foray Zhaopin has been filled with junk listings to fabricate illusions of user growth to the market. Yesterday, Seek conceded that Zhaopin did indeed contain fake ads, although noting that the allegations by Blue Orca were 'exaggerated'. Seek last traded at A$21.33, compared to Blue Orca's valuation of just A$7.20 per share.
Important News Flow:
In Australia, increased nervousness may be reflected in trading activity and market movements as the US election result looms tomorrow. Investors may also look toward the RBA policy meeting for macro-level indicators, with many analysts speculating that the Bank will cut rates again.
As the US Election results begin to roll in tomorrow morning in New Zealand, all eyes will be on the reaction of Trump as he will look to claim early victory any way he can. Tomorrow's election is certain to be unlike any other.
• 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-disclaimer
