Jarden Brief: All major US indices in the red

Markets had a slow start after the long weekend in the United States. Photo / Getty Images

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

New Zealand

The S&P NZX 50 closed Tuesday's trading slightly higher, up 0.1 per cent for the second day running, now trading at 12,814.5 points.

Scales Corp was the frontrunner as the agribusiness posted a 3.0 per cent gain, continuing a strong start to the week. Scales reports its full-year earnings in late February. Retailer Kathmandu Holdings, and healthcare company Pacific Edge Limited, made up the remainder of the single stock winners podium with 2.8 and 2.4 per cent gains, respectively.

Precinct Properties along with large-cap market staples Auckland Airport and Mainfreight went against the run of play, each posting 2.1, 1.4, and 1.3 per cent losses on a quiet day with limited news flow.

Other news during the week included feedback after the holiday retail season, with Michael Hill Jeweller releasing a strong Christmas sales update, guiding to a first half 2022 earnings before interest and taxes (EBIT) of $49-53 million. In contrast, The Warehouse Group reported a weaker second quarter sales update.

International                                                                                         
US

The US markets resumed trading on Tuesday. At the time of writing all major US indices were in the red, with the S&P 500 declining 1.7 per cent, the NASDAQ down 2.0 per cent, and the Dow Jones Industrial Average (DJIA) trading 1.6 per cent lower.

All sectors were underperforming, with financials booking the biggest losses, decreasing 2.6 per cent. Materials and technology were next in line, down 1.8 and 1.7 per cent, respectively.

The single stock best performer on the S&P 500 this morning was interactive entertainment content developer Activision Blizzard jumping 25.1 per cent. Microsoft (-1.3 per cent) will buy Activision Blizzard in a US$68.7 billion deal, paying US$95 per share in cash, creating the world's third-biggest gaming company.

Digital workspace solutions provider Citrix Systems also performed well, at the time of writing, rallying 5.7 per cent. Bloomberg reported the company is said to be in advanced talks for a buy-out by Elliot Investment Management and Vista Equity Partners.

Rounding out the biggest gainers in the session was interactive entertainment company Electronic Arts, rising 4.9 per cent.

On the flip side, vaccine producer Moderna booked the biggest losses, declining 8.8 per cent. The company announced that it is planning to produce a single Covid and booster jab within two years.

Goldman Sachs dropped 8.1 per cent after a quarterly earnings announcement that appeared to disappoint investors. Earnings per share came in at US$10.81 versus analysts' expectations of US$11.76. Operating expenses jumped 23 per cent to US$7.27 billion for the quarter, which was above the estimate of US$6.77 billion. Revenue of US$12.64 billion exceeded estimates of US$12.08 billion.

Apparel company Gap also underperformed, declining 7.0 per cent.

The latest building permits and housing starts numbers for the US will be released tonight.

Rest of the World

The major Asian indices delivered a mixed performance over night. The Shanghai Composite increased 0.8 per cent, the Nikkei declined 0.3 per cent, the Hang Seng closed 0.4 per cent lower, and the Shenzhen rose 0.2 per cent.

UK start-up Wayve, which is working toward autonomous driving cars, completed its latest funding round. It included big names, such as Microsoft, Virgin and Baillie Gifford, investing US$200 million. The start-up is said to now have a valuation of US$1 billion, which would make it a "unicorn" company. Kiwi CEO and co-founder Alex Kendall said that the company is taking a different approach to other firms, using machine-learning software and a few cameras to teach the car how to behave in complex situations. The software used to train Wayve's systems is likely to be Microsoft's Azure.

Commodities

Gold edged slightly lower this morning, decreasing 0.2 per cent to US$1,813.40 per ounce.

Oil jumped 1.7 per cent to US$85.26 per barrel, after Houthi militants attacked Abu Dhabi, the capital of the United Arab Emirates (UAE) and killed three people. These new tensions put pressure on oil prices as there is a chance it will affect supply.

Cryptocurrencies traded lower for a second day, as Bitcoin declined 1.0 per cent and Ethereum was down 2.7 per cent.

The 10-year US treasury rate rose to over 1.85 per cent in early morning trading, its highest level in two years. The yield came down slightly during the session and was trading at 1.847 per cent at the time of writing.

Australia

The ASX 200 fell 0.2 per cent yesterday, led downwards by healthcare (-1.2 per cent) and utilities (-0.6 per cent).

Pointsbet Holdings fell 3.7 per cent, continuing last week's decline and Virgin Money declined 3.5 per cent. Despite this, Virgin Money is up 17.2 per cent in the past month.
Materials gained 0.6 per cent and A-REIT increased 0.4 per cent.

Bio-tech company Imugene increased 7.0 per cent on what appears to be no news.
JB Hi-Fi gained 6.7 per cent following the release of a trading update outlining first half 2022 net profit after tax (NPAT) being about 13 per cent ahead of consensus expectations, down only 9.0 per cent year on year and up 69 per cent compared to the first half of 2020. The key themes of the update appeared to be controlled costs and no current signs of supply chain issues.

Fintech company Beforepay sank 44 per cent following its IPO on Monday. The company offers customers an advance on their pay for a 5.0 per cent fixed fee. It made a partial recovery of 12.3 per cent yesterday.

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

Disclaimer: The Jarden Brief is provided for general information purposes only. It reflects views and research available 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. The Jarden 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 financial advice disclosure statement is available free of charge at https://www.jarden.co.nz/our-services/wealth-management/financial-advice-provider-disclosure-statement/ Full disclaimer available at: https://www.jarden.co.nz/wealth-sales-and-research-disclaimer