Apple looking to lean into online shopping even further. 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 was in the red yesterday with the index making a loss of 0.5 per cent to finish at 12,719.7 points amidst fears of possible interest rate hikes.
Markets reacted to updates from The Reserve Bank of New Zealand (RBNZ). As widely expected, the Official Cash Rate (OCR) remained unchanged at 0.25 per cent.
However, the RBNZ decided to cease its large-scale asset purchase programme - a mechanism used to inject cash into the economy - citing favourable economic conditions as reason to cut the stimulus.
Commentators viewed this as further evidence of potential rate hikes, with some even predicting upward movements in the OCR within the next three months.
The only outperforming sector of the day was consumer non-cyclicals, advancing 0.3 per cent against the tide. Sector gains were buoyed by impressive performances from corporate travel booking software company Serko, which traded higher by 2.4 per cent.
On the other hand, Vista Group underperformed on Wednesday, slumping to a 3.0 per cent loss. Vista provides technology to the film/cinema industry, updating its cash flow position to an amount deemed underwhelming by the market.
Property group, Precinct Property, was Wednesday's second worst performer, down 2.9 per cent after confirming the acquisition of another Wellington investment property for NZ$49 million.
Meanwhile, dairy processor, Synlait Milk, finished up 2.1 per cent. Synlait traded positively despite news that global dairy giant, Olam, is considering the construction of a dairy processing plant in New Zealand, something that would increase competition amongst the sector.
Markets were weighed down by both the financials and energy sectors, which have fallen 1.6 and 1.4 per cent.
INTERNATIONAL
US
At the time of writing, the S&P 500 was up by 0.2 per cent, the DJIA rose 0.1 per cent, and the NASDAQ was down 0.1 per cent. This showed cautious optimism by the market after Jerome Powell, chairman of the Federal Reserve, indicated that the central bank plans to continue easing monetary policies which were implemented to provide economic support in response to the pandemic.
Utilities and real estate were leading the market higher, increasing 1.2 and 1.1 per cent, respectively. On the other hand, energy and financials were the worst performers, dropping 2.3 and 0.7 per cent, respectively.
The top gainer of the S&P 500 was bulge bracket bank, Wells Fargo, rising 3.4 per cent in response to its earnings announcement before market open.
Next in line was American Airlines Group, continuing its upward trend and ascending another 3.3 per cent. The airline holding company had announced better than expected revenue for the second quarter, a week ahead of its official quarterly report.
Over the counter health and wellness solutions provider, Perrigo, was also up 2.8 per cent.
The worst performers of the day were all oil and gas exploration companies. Occidental Petroleum fell 6.2 per cent and Diamondback Energy was down 5.6 per cent. Rounding out the biggest losers was APA Corporation, decreasing 5.5 per cent.
The Labor Department published its report on the Producer Price Index (PPI), which increased by 7.3 per cent year-on-year, the biggest jump in 11 years. The core PPI rose 5.5 per cent, the largest increase since August 2014. Like the CPI, which was reported on the previous day, the PPI is an inflation indicator.
Rest of World
The major Asian indices were all down overnight, breaking their latest upward trend. The Nikkei decreased by 0.4 per cent, the Shanghai index was down 1.1 per cent, and the Hang Seng declined 0.6 per cent.
China's national carbon market is said to start trading online this Friday. It will become the world's largest emissions trading system and will cover more than 2,200 companies in China's power sector.
On Wednesday, the European Union policymakers announced their new plan to address climate change- an ambitious undertaking to implement concrete action this decade to achieve its green goals. It aims to cut emissions by 55 per cent until 2030.
Commodities
Gold increased by 0.8 per cent to US$1,825.00 per ounce.
Oil dropped 3.3 per cent to US$72.74 per barrel.
Cryptocurrency prices were on the recovery at time of writing. Ethereum rose 3.8 per cent and Bitcoin increased 1.7 per cent, but was still trading just below the US$33,000 mark at US$32,889.14.
The US 10-year bond rate declined after Powell's statement regarding the central bank's easing money policy, yielding 1.366 per cent.
Australia
The ASX 200 closed 0.3 per cent higher yesterday.
Utilities rose 3.4 per cent and consumer staples rose 0.9 per cent as the top performing sectors, while information technology was the worst performer, down 2.7 per cent.
Infrastructure investor, Spark Infrastructure Group, was the top performer of the ASX 200 yesterday, up 7.8 per cent. The stock price hit a two year high before trading was halted following a news report detailing that the company was a takeover target – likely an example of the market buying on leaked information prior to the announcement.
Health product company, Blackmores, rose 6.2 per cent, possibly a reaction to the heightened Covid-19 concerns in Australia.
Ramelius Resources rose 5.1 per cent, benefiting from a rise in the gold price, with the Australian gold index up 2.5 per cent. Gold is typically an inflation hedge, and with concerns in the US regarding the recent PPI and CPI prints, the metal has begun climbing in price.
Buy-now-pay-later providers, Zip Co and Afterpay, both took a hit yesterday, down 11.4 and 9.6 per cent respectively, leading the information technology sector downwards. This followed the announcement from Apple that they are working on a buy-now-pay-later service themselves, partnering with Goldman Sachs.
The Westpac-Melbourne Institute Index of Consumer Sentiment for Australia surprisingly rose by 1.5 per cent in July despite the latest lockdown in New South Wales, indicating Covid-19 concerns have not yet affected Australia's consumer sentiment.
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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>
The Kiwi is under pressure as the US dollar rises on expectation of higher interest rates.