Many of the apartments built by Evergrande remain vacant. Photo / Getty Images
Keeping you up to date with the latest market moves, in association with Investment firm Jarden
New Zealand
The NZX 50 rebounded to recover its losses from the start of the week, closing 0.3 per cent higher on Wednesday.
Consumer staples and industrials were the winners of the session, up 1.6 and 0.6 per cent, respectively. On the flip side, financials and utilities underperformed, decreasing by 0.8 and 0.2 per cent, respectively.
After a positive Global Dairy Trade Auction result yesterday morning, the best performers of the NZX 50 were Synlait Milk (+3.8 per cent) and a2 Milk Company (+2.0 per cent). While the two companies might see an increase in their input costs from the 2.2 per cent price improvement of whole milk powder, the upbeat demand sentiment may have provided a positive backdrop for the sector.
Kathmandu Holdings also performed well, increasing by 2.7 per cent. The outdoor retailer released its 2021 full-year results investor call transcript yesterday, from the call on Monday. While the company's revenue increased 15.1 per cent year-on-year, there was a 17.0 per cent decline in Kathmandu brand sales, heavily impacted by the extended lockdowns in Australia.
The worst performer of the day was banking services group, Heartland Group Holdings, decreasing 2.6 per cent. Retirement village operator Ryman Healthcare also underperformed by 2.5 per cent. Rounding out the underperformers was Port of Tauranga, down 2.5 per cent.
At Trustpower's (+0.8 per cent) virtual annual shareholders' meeting yesterday, a majority of shareholders voted in favour of the gentailer selling its retail arm to competitor, Mercury Energy (-1.5 per cent) for $441 million in cash. The Commerce Commission is expected to decide on the clearance of the deal on 28 September 2021.
International
US:
US markets were in the green this morning at the time of writing, with the S&P 500 up 1.3 per cent, the Nasdaq 1.2 per cent higher, and the Dow Jones Industrial Average trading up 1.4 per cent.
The Federal Reserve meeting result was released, with bond buying to continue at the current rate for now. However, the statements did suggest that if progress continues 'broadly as expected', there might be a moderation in the pace of asset purchases. The continuation of stimulatory monetary policy at its current level provided support for US markets.
All sectors rose with energy up 4.3 per cent and financials gaining 2.2 per cent, leading the index upwards.
The top performers for the session were all energy companies. APA rose 9.0 per cent, Devon Energy gained 7.9 per cent and Occidental Petroleum increased 6.8 per cent. The 2.2 per cent increase in the WTI Crude Oil price drove these energy companies upwards.
FedEx declined by 8.5 per cent to a 52-week low. It reduced its full-year forecast stating labour shortages, which has had the effect of slowing delivery and increasing costs.
Incyte fell 6.7 per cent to a 52-week low. The pharmaceutical company's eczema cream was approved by the US Food and Drug Administration but only with boxed warnings including risk of serious infections and increased risk of heart attack, stroke or cardiac death.
Facebook lost 3.4 per cent. This followed an announcement that it has underreported ad performance to the tune of approximately 15 per cent in the third quarter, after an Apple privacy update. Facebook's revenue model is largely driven by advertisements.
Rest of the World:
The Hang Seng (Hong Kong) increased by 0.4 per cent, the Shanghai Composite (China) rose by 0.5 per cent, and the Nikkei (Japan) fell 0.7 per cent overnight.
China's second largest property developer (by sales), Evergrande, announced it had negotiated a deal with its local currency bond holders on today's interest payment.
Despite few details of the 'privately negotiated' agreement being announced to the public, it has seemingly calmed the market of its contagion concerns for now.
Commodities:
Gold rose 0.3 per cent to US$1,783.90 per ounce. WTI Crude Oil increased by 2.2 per cent, now priced at US$72.07 per barrel while the 10-year US bond yield trades slightly lower at a 1.304 per cent yield following the Fed announcement.
Cryptocurrency made a partial recovery after two consecutive days of decline, with Bitcoin trading up 4.1 per cent and Ethereum gaining 6.2 per cent.
Australia
Australian equities were in the green yesterday, with the S&P/ASX 200 trading up 0.4 per cent to 7,302.2 points at yesterday's close.
On Wednesday morning the Reserve Bank of Australia (RBA) addressed the current housing situation. The RBA cited sharp increases in house prices along with the uncertain macroeconomic environment as cause for concern, especially considering the growing household debt-to-income levels. The central bank has noted it will continually assess the need to alter its macro-prudential tools.
Sector gains included educational services and energy, leading the way with 2.4 and 2.1 per cent increases, respectively.
Overall, index movements were well supported by the single stock winner, electronics and metal recycler Sims Ltd. Sims traded higher by 6.1 per cent as it continues the implementation of a share buyback. Similarly, infrastructure engineering and design firm Worley traded favourably (up 5.0 per cent), in line with rebounding oil and commodities prices, which will affect its main customers.
On the other hand, markets were weighed down by both the financials and consumer staples sectors, which fell 0.6 and 0.1 per cent, respectively.
The worst performing stocks were Premier Investments Ltd and Link Administration Holdings Ltd, each slipping 4.5 and 3.4 per cent by the close of market.
• 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>
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