Jarden Brief: Consumer spending amps up before Christmas

Consumers have increased their spend in the lead up to the festive season. Photo / Getty Images

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

New Zealand

The NZX 50 declined 0.4 per cent yesterday, led downwards by technology and healthcare, falling 1.4 and 0.9 per cent, respectively.

Today marks the first day of New Zealand entering the Covid-19 Protection Framework, a much-awaited reopening step which should stimulate greater economic activity, particularly in Auckland following more than 15 weeks of lockdowns.

There is also some evidence that consumers are amping up spending heading into Christmas – with freight company DHL Express citing unprecedented demand, which has led it to charter passenger planes from airlines.

Consumer cyclicals rose 1.8 per cent and utilities increased a slim three basis points.

Fletcher Building increased 3.3 per cent. Yesterday it announced an on-market share buyback to the tune of 454,848 ordinary shares – which amounts to less than 1.0 per cent of its outstanding shares.

Retirement village operator Summerset Group gained 2.1 per cent while NZX fell 2.8 per cent.

Vista Group International declined 3.4 per cent, despite the global market seemingly turning more positive around the potential impacts of Omicron.

Skellerup fell 2.3 per cent, despite this dip, the company remains up more than 25 per cent in the past six months.

International                                                                                         
US

US equities looked to finish the week stronger amid easing concerns over the potency of the new Omicron Covid-19 variant. At the time of writing the S&P 500, Nasdaq, and Dow Jones Industrial Average were currently trading higher by 1.4, 0.9, and 1.9 per cent, respectively.

Markets were buoyed by commentary from Pfizer Inc (-2.6 per cent), whose management suggested its Covid-19 vaccine should hold up well against the new strain of the virus, not expecting a significant drop in effectiveness.

Outperforming sectors include financials and industrials, which made solid gains of 3.1 and 2.8 per cent, respectively. No sectors made losses for the second day running.

Sector gains were buoyed by an impressive performance by food retailer Kroger & Co after it posted a strong earnings beat. Kruger's third quarter results included revenue of US$31.9b and earnings per share of 64 cents in combination with an upgrade to full year guidance, pushing the stock higher by 12.5 per cent.

Delta Airlines (+7.9 per cent) and travel company Carnival Corp (+7.2 per cent) rounded off the best performers as both made gains as the market continues to build optimism around the extent of Omicron travel disruptions

PVH Corp, the apparel company with brands including Tommy Hilfiger and Calvin Klein, fell 5.5 per cent. In contrast to Kroger, its third quarter earnings came in below consensus estimates.

Rest of the world

Asian indices were mixed overnight. Highlights include the Hang Seng trading higher by 0.6 per cent while the Shanghai Composite and the Nikkei lost 0.1 and 0.7 per cent by market close.

News included electronics company Razer Inc falling 7.9 per cent against the rising tide on the Hang Seng. Its co-founders announced it had been considering taking the company private again, with the initial offer price at US$2.82 per share (a 5.6 per cent upside to the current share price) – something which seemed underwhelming to current shareholders.

Commodities

In commodities this morning, gold is trading weaker by 1.0 per cent at US$1,766.1 per ounce. WTI crude oil strengthened, now priced US$66.7 per barrel. This may have been influenced by the OPEC (Organisation of Petroleum Exporting Countries) decision to stick with its proposed production hike of 400,000 barrels per day in January 2022.

US 10-year bond yields are steady, now priced at 1.47 per cent. Crypto currencies also had a quiet night, with Bitcoin and Ethereum making losses of 0.8 and 2.0 per cent, now trading at US$56,563 and US$4,500.

Australia

The ASX 200 closed slightly lower, down 0.2 per cent, setting a new 20-day low.
Seven out of 11 sectors closed in the red, led with information technology dropping 3.2 per cent and healthcare decreasing 1.1 per cent. Utilities and industrials performed well, increasing by 1.5 and 1.0 per cent, respectively.

Leading the index lower was superannuation platform provider Netwealth Group, dropping 6.3 per cent.

Buy now pay later giant Afterpay also underperformed, decreasing 6.1 per cent. The company announced the postponement of its shareholder meeting, scheduled for 6 December, where its acquisition by Square (renamed to Block) was expected to be approved. The decision to postpone was stated due to the delay with regulatory approval by the Bank of Spain.

Infrastructure firm Worley was the best performing stock on the ASX 200 yesterday, gaining 6.5 per cent. Its investor day, held on Tuesday, seemed to have pleased the market as it has reversed the stock's decline over November.

Energy retailer AGL Energy traded higher, up 3.6 per cent. G.U.D. Holdings was also up 2.8 per cent, partially recovering from its drop in the previous session.

Mineral explorer Orocobre decreased by 5.4 per cent, reversing some of the momentum which has picked up in the stock since the company's AGM earlier this week.

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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