Jarden Brief: US economy just too hot for some investors

Better than expected new job numbers in the US have some analysts worrying about an interest rate hike. Photo / NYC & Company

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

International

US

Stocks fell during Thursday’s trading after better-than-expected jobs data was released.

In June there was a 497,000 job increase in the private sector according to payroll company ADP.

This has increased investor fears about the state of the economy and the path of interest rates.

At the time of writing, the Dow Jones Industrial Average slid 1.0 per cent, S&P 500 was down 0.8 per cent, and the Nasdaq Composite also fell 0.8 per cent.

Microsoft was in the green. At the time of writing, it was up 1.0 per cent as Morgan Stanley analysts lift their outlook above US$3 billion market-cap due to the company’s AI driven gains seen in the first half of this year.

Hedge fund manager Man Group saw an increase of 1.9 per cent on the day as it moved into the private credit sector after news was released of a purchase of a controlling stake in lender Varagon Capital for US$183 million.

Exxon Mobil fell 3.3 per cent due to signaling its operating profits fell sharply in the second quarter of 2023 due to lower natural gas prices and weaker oil refining margins.

Profits could drop to as little as US$6.2b for the quarter, nearly half of the US$11.4b seen in the first quarter of the year. Results are expected to be released on 28 July.

New Zealand

At home, the S&P/NZX 50 was very volatile. During Thursday’s session, the Index rose to 12,055.2 points, but at close finished in the red at 11,959.33, or down 0.4 per cent since open. That was the first fall the New Zealand market had seen in eight trading days.

Pacific Edge was the biggest mover on the day, up 110 per cent after receiving a reprieve on funding for its Cxbladder tests in the United States which end on 17 July.

Vista Group rose 7.7 per cent on the day after announcing the re-structuring all of their brands and bringing them into one business model. It is expected that there will be a reduction in staff by 6-8 per cent.

2 Cheap Cars Group also upgraded their earning guidance which saw a 26.7 per cent rise, as the expected full year profit will go from previous expectation of $3.8-$4.2 million, to the range of $4.2 to $5.0m.

Australia

Across the ditch, the S&P/ASX 200 fell 1.2 per cent on Thursday’s trading to 7163.4 points, following from losses seen in 10 of the 11 industry sectors.

Magellan Financial Group was one of the worst performers of the day. Its share price sunk 8.3 per cent after releasing news investors withdrew a total of A$2.1b in the month of June alone.

The mining sector was one of the worst performers on the day, down an average of 1.9 per cent, weighted down by iron ore producers as iron ore futures traded lower on the Singapore exchange, down 0.8 per cent.

Mineral Resources fell 3.6 per cent, Fortescue Metals down 1.7 per cent and BHP Group dropped 2.3 per cent on the day.

Major banks also had a drop after the Federal Reserve minutes were released overnight, a key takeaway being rates are likely to rise again next month.

Commonwealth Bank was down 1.3 per cent, Westpac fell 1.7 per cent, National Bank dropped 2.1 per cent and ANZ retreated 1.9 per cent.

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

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All market pricing and announcements are sourced from Refinitiv, NZX and ASX.