Jarden Brief: Australian business confidence plummets

Ongoing lockdown conditions are hitting the Australian economy hard. Photo / Getty Images

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

New Zealand

The NZX 50 closed 0.5 per cent higher on Tuesday.

Consumer non-cyclicals and real estate stocks were leading the market higher, improving by 1.0 and 0.9 per cent, respectively.

The energy sector was the only laggard of the day, moderating -0.7 per cent after a strong performance from Z Energy over the last week.

Utilities were up after electricity blackouts for parts of the North Island last night. It was one of the coldest nights of the year and demand surged to new highs. The Minister of Energy and Resources, Megan Woods, wrote to the generators to enquire about the reasons of the lack of supply and urged them to work with Transpower and the Electricity Authority to prevent another failure of the system.

Skellerup Holdings booked the biggest gains of the session. The agri-industrial manufacturer rose 1.9 per cent.

Property-exposed stocks also seemed to do well, with retirement village owner and operator Ryman Healthcare, up 1.7 per cent. Fletcher Building was also performing well, in anticipation of the company's release of its 2021 financial year results on 18 August.
The residential and commercial construction company increased by 1.6 per cent.

Meanwhile, Napier Port Holdings corrected some of its gains made over the previous week, declining by 2.7 per cent. The Port of Tauranga also declined, closing 1.3 per cent lower. The Covid-19 test results of more than half of the port workers who unloaded the Rio de la Plata have come back negative - with the rest of test results outstanding.

NZX Limited closed the day 1.6 per cent lower, while Restaurant Brands New Zealand, operator of KFC, Pizza Hut and Carl's Jr., decreased by 1.5 per cent.

INTERNATIONAL
United States

This morning the S&P 500 was trading up 0.1 per cent, the DJIA had increased by 0.4 per cent, and the NASDAQ was down 0.6 per cent.

The DIJA hit a new intraday high with the US$1 trillion bi-partisan infrastructure bill passed this morning in the Senate. This bill will fuel US economic growth post-pandemic.

Energy and materials stocks were outperformers, with each sector rising 1.9 and 1.5 per cent, respectively. On the flip side, real estate and technology were the worst performing sectors, falling 0.9 and 0.6 per cent, respectively.

Stocks that will potentially benefit from the increased infrastructure spend of the US$1 trillion bill were in the green this morning. Nucor Corp rose 9.3 per cent to a new 52-week high. The manufacturer of steel and steel products is viewed by the market as one of the companies positioned to benefit from the bill.

Kansas City Southern rose 7.3 per cent. The owner of domestic and international rail operations in North America jumped after Canadian Pacific Railway sweetened its buyout offer to an implied US$300 per share.

Memory and storage solutions company Micron Technology fell 5.3 per cent.
Moderna declined by 4.5 per cent. This likely represents an adjustment of some of the week's gains following the stock reaching new 52-week highs.

Asia:

The major Asian indices performed strongly overnight. The Nikkei (Japan) traded up 0.2 per cent, the Hang Seng (Hong Kong) rose 1.2 per cent and the Shanghai Composite (China) rose by 1.0 per cent.

Commodities

Gold increased 0.3 per cent to US$1,731.70 per ounce.

Oil was a recovery story overnight, this morning trading 2.9 per cent higher at US$68.40 per barrel.

Cryptocurrencies lost some of Monday's gains this morning, with Bitcoin decreasing 2.4 per cent and Ethereum decreasing 1.9 per cent at the time of writing.

Finally, the US 10-year treasury bond rate was yielding 1.339 per cent, buoyed by the passing of the Senate infrastructure bill and ahead of US inflation data this week. The market will likely be closely watching the inflation data release.

Australia

Australian equities nudged forward yesterday with the S&P/ASX 200 trading up 0.3 per cent to 7562.6 points on Tuesday's close.

The National Australia Bank's business survey for the month of July highlighted the ramifications of current lockdown measures. Business confidence fell from +11 in June points to -8, with businesses understandably unsettled about current conditions. The conditions index fell to +8 points from a previous +24.

Sector gains included financials and technology, each leading the way with a 0.8 and 0.7 per cent increase, respectively.

Overall index movements were well supported by the single stock winner – metal exploration company Pilbara Minerals, which traded favourably (up 11.0 per cent) on the back of strong lithium prices.

Similarly, Pointsbet Holdings jumped a sizeable 9.9 per cent after the DraftKings – Golden Nugget acquisition, in which the former looked to acquire the latter for a sizeable 53.0 per cent implied premium. Golden Nugget is also in the online gambling space, although specialises in iGaming – which PointsBet has only recently ventured into. Finally, the online gambling company also added an executive to its management team, with industry veteran Aonghus Mulvihill appointed as vice president for global sportsbook trading.

On the other hand, markets were weighed down by both the academic & educational services and energy sectors which have fell 1.1 and 0.8 per cent, respectively.
Ramelius Resources finished on the single stock losers podium for the second consecutive day, down 5.9 per cent. Ramelius was joined by St Barbara (down 5.0 per cent), as the gold mining company capped off what was a very volatile day in the mining and resources sector.

• 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>