The omicron variant is tearing through Australia. Photo / NZME
Keeping you up to date with the latest market moves, in association with Investment firm Jarden
New Zealand
The New Zealand markets on Wednesday reacted to a poor early morning trading session in the US, down 1.6 per cent, finishing at 12612.3 points.
Markets may also have been influenced by the release of ANZ's business confidence survey for the month of December, with the index falling another seven points to -23.2 from -16.4 in November.
Some stocks were able to make headway on Wednesday, with casino and hotel operator Sky City up 1.7 per cent to lead the market, closely followed by Restaurant Brands and Precinct Properties, making 1.0 and 0.6 per cent gains, respectively.
The Real Estate Institute of New Zealand's (REINZ) monthly residential property report this week showed the median New Zealand house price had increased by 21.5 per cent year-on-year in December 2021, to $905,000. However, this is a 1.6 per cent drop from November 2021. Auckland followed a similar trend, posting an annual increase of 20.6 per cent for the last month of the year, but a 1.3 per cent decrease month-to-month.
Commentary from REINZ included reference to changes to the Credit Contracts and Consumer Finance Act (CCCFA) which came into play on the 1 December 2021, leading to a squeeze on approval rates for home loans and other financing.
44 of the 50 stocks traded lower by the close. Most notably, film technology company Vista Group (-4.0 per cent), New Zealand's stock exchange operator NZX (-3.3 per cent) and large cap healthcare company Fisher and Paykel (-3.2 per cent).
International
US
The S&P 500 (+0.2 per cent), the NASDAQ (+0.1 per cent), and the Dow Jones Industrial Average (+0.2 per cent) seemed to have ceased Tuesday's downward trend and were trading slightly higher at the time of writing.
Only three out of the 11 sectors were in the red, namely consumer discretionary (-0.6 per cent), financials (-0.4 per cent), and energy (-0.1 per cent). Consumer staples (+1.3 per cent) and utilities (+1.1 per cent) were booking the biggest gains this morning.
The best performer on the S&P 500 was Take-Two Interactive Software, increasing 7.8 per cent. In light of the Activision Blizzard deal with Microsoft, media outlets began reporting that Activision was in talks with a financial adviser to discuss an offer for a takeover by game developer Zynga, which would have topped Take-Two's US$12.7 billion acquisition.
Zynga is currently running a 45-day "go shop" period during which other companies can make offers.
Newmont Corporation also performed well, up 4.7 per cent. The gold and precious metal explorer and producer seemed to have benefitted from stronger precious metal price performance.
Newmont Corporation's performance was followed by Procter & Gamble, trading 4.2 per cent higher. The packaged consumer goods producer reported its second quarter 2022 earnings before market-open. Sales rose 6.0 per cent, led by health and cleaning products, with price increases making up half of the gain. Management also shared that price hikes will continue in 2022 to cover expected increases in freight and commodity prices to protect its profit margins.
Leading the index lower was financial services holding company US Bancorp, declining 7.3 per cent. The company reported its fourth quarter 2021 results before market-open. Net income rose to US$1.67 billion versus US$1.52 billion in the previous year and earnings per share climbed 12 cents to US$1.07, slightly below analysts' expectations of US$1.10. Due to lower mortgage banking revenue, the company's net revenue declined to US$5.68 billion, down from US$5.75 billion in the previous corresponding period.
Next in line was Ford Motor, down by 6.1 per cent. The automobile maker had topped a US$100 billion market capitalization for the first time ever last week. This week the company announced that, together with security systems provider ADT (-0.6 per cent), it had formed a joint venture called Canopy. This joint venture is intended to provide AI-powered connected security cameras, as well as a mobile app, for Ford vehicles.
Rounding out the bottom movers was financial holding company State Street Corp, decreasing 4.9 per cent, which reported its fourth quarter 2021 earnings before market open. Total quarterly revenue was US$3.05 billion, up 4.7 per cent year-on-year, while net interest revenue decreased by 3.0 per cent to US$484 million.
US initial jobless claims and existing home sales will be reported tonight, NZ time.
Rest of the World
The performance of the major Asian indices was mixed overnight. The Shanghai Composite declined 0.3 per cent, the Nikkei dropped 2.8 per cent, the Hang Seng rose 0.1 per cent, and the Shenzhen closed 1.3 per cent lower.
Yesterday, the German 10-year bond yield traded in positive territory for the first time since May 2019.
Commodities
Commodities were delivering a strong performance at the time of writing.
Gold rose 1.6 per cent to US$1,840.60 per ounce, while oil rallied 2.8 per cent to US$87.73 per barrel.
Cryptocurrencies were a mixed bag, although Bitcoin and Ethereum were both trading higher, up 1.5 and 0.8 per cent, respectively.
The US 10-year treasury rate was yielding 1.845 per cent this morning.
Australia
The ASX 200 closed 1.0 per cent lower yesterday, led downwards by information technology and healthcare, falling 2.6 and 1.6 per cent, respectively.
Energy and utilities were the only sectors in the green, each up 0.6 and 0.2 per cent.
Machine intelligence company Appen rose 3.9 per cent and Harvey Norman increased 3.0 per cent, both on what appeared to be no news.
On the flip side, software company Megaport slumped 16.1 per cent with the release of a second quarter update. While customer numbers grew 5.0 per cent, a quarter-on-quarter increase of 7.0 per cent in monthly reoccurring revenue appears to have disappointed the market.
The battery materials and technology company Novonix declined 9.7 per cent with no clear catalyst. On 10 January it announced that it would initiate the process of a secondary listing on the Nasdaq which saw shares rise 7.0 per cent. Novonix' share price volatility has been high in January.
Australian consumer confidence slumped 7.6 per cent last week to the lowest level since October 2020 and the weakest January level since 1992. The widespread Omicron outbreak continues in Victoria and New South Wales with hundreds of thousands of active Covid-19 cases.
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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
The Reserve Bank will this week deliver a new set of forecasts for where rates are headed.