Jarden Brief: Gaming giant Activision Blizzard slumps 15 per cent

Investors were not impressed with the company's results. Photo / Getty Images

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

New Zealand

On Wednesday, the NZX 50 closed flat despite trading higher in the first half of the day.
The healthcare sector (+0.8 per cent) was again aided by Fisher & Paykel Healthcare's performance (+1.9 per cent). The sector along with financials (+0.6 per cent), posted gains, while consumer non-cyclicals (-1.2 per cent) and utilities (-0.5 per cent) underperformed.

Tourism Holdings was the best performing stock on the NZX 50 yesterday, up 2.5 per cent. The motorhome rental company continued the momentum after the sale of its Mighway and SHAREaCAMPER businesses was announced last week.

Film software company Vista Group International increased by 2.0 per cent, while outdoor retailer Kathmandu Holdings improved another 1.9 per cent during the session.

Leading the index lower was Port of Tauranga, declining by 2.4 per cent on increasing bond yields. Next in line was agri-manufacturer Skellerup Holdings, reversing some of the previous session's gains, down 2.2 per cent with reports of increased freight costs continuing to circulate. Rounding out the biggest decliners of the day was gentailer Meridian Energy, decreasing 1.6 per cent.

The latest unemployment numbers released by Statistics New Zealand showed a decline in the unemployment rate. Despite lockdowns, the rate decreased to 3.4 per cent from 4.0 per cent for the quarter that ended in September. The number of unemployed people fell to 98,000. Simultaneously, the underutilisation rate fell from 10.5 per cent to 9.2 per cent for the September quarter. These are record lows since December 2007.

International                                                                                         
US

The US markets were a mixed bag this morning ahead of the Federal Reserve meeting verdict. The S&P 500 was down 0.1 per cent, the Nasdaq was trading up 0.1 per cent, and Dow Jones Industrial Average had fallen 0.4 per cent as the market awaits the Federal Reserve meeting result.

Materials and consumer discretionary were the leading sectors, up 0.6 and 0.5 per cent, respectively.

FMC Corp gained 12.9 per cent. The agricultural services company rose on the back of exceeding earnings and revenue expectations in the third quarter. Earnings per share was US$1.42 compared to a US$1.30 expectation.

Another outperformer was Akamai Technologies, increasing 6.9 per cent. Several high-profile cybersecurity attacks saw the information technology company report strong third quarter results and grow their cybersecurity business.

Industrials and utilities pushed the S&P500 downwards, falling 1.0 and 0.9 per cent, respectively.

Video game company Activision Blizzard dropped 15.1 per cent on its results release. Earnings per share exceeded consensus at US$0.72 compared to an expected US$0.70. Revenue of US$1.88 billion was in line with expectations. The decline may be linked to investors looking to reward companies who are exceeding expectations to a greater extent, this reporting season.

Falling 10.7 per cent was Charles River Laboratories. Third quarter 2021 results outlined a 20.5 per cent increase in revenue year-on-year and a 1.0 per cent decline in earnings per share for the period compared to third quarter 2020.

Rest of the world

The major Asian indices declined again overnight, with the Hang Seng down 0.3 per cent, the Nikkei falling 0.4 per cent, and the Shanghai Composite declining 0.2 per cent.

Commodities

In commodities this morning, gold slipped 1.5 per cent to US$1762.20 per ounce, with investors bracing for the Federal Reserve announcement. WTI crude oil declined 3.1 per cent to US$81.30 per barrel after US crude oil stocks rose more than expected in the previous week, up to 3.3 million barrels. The US 10-year bond is trading at 1.566 per cent.

Of the commonly followed cryptocurrencies, Bitcoin declined 1.6 per cent while Ethereum gained 0.7 per cent.

Australia

The ASX 200 yielded a 0.9 per cent gain on Wednesday, as the index rebounded after a poor Tuesday session to finish at 7,392.7 points.

Materials and financials led the way, pushing markets higher with 1.4 and 1.2 per cent gains, respectively. The only two sectors to make losses were educational services and technology, each slipping 0.9 and 0.1 per cent, against the run of the day.

Investment firm AMP Capital jumped 9.3 per cent after it was revealed the company had sold its 19 per cent stake in life insurance firm, Resolution Life. The A$524m sale, and the divestment, was seemingly well-received by investors.

Lithium miners erased losses from earlier in the week as both Pilbara Miners and Orocobre Ltd pushed higher on the back of the rebounding lithium price overnight. Each stock made a gain of 6.7 and 5.3 per cent, respectively.

Online payment technology provider Tyro Payments declined 15.0 per cent in the aftermath of its annual general meeting. Tyro management provided little forward-looking guidance, which looks to have upset investors looking for more tangible proof of growth.

Online marketplace Redbubble also traded lower with the release of their 27 October investor presentation slides. These presentations often disclose further data and metrics to wider stakeholders on business performance. These appear to have underwhelmed the market, as the stock fell 3.9 per cent.

Lastly, telecommunications infrastructure and service provider Uniti Group lost 3.6 per cent. This may have been in relation to Telstra signing a new 5-year, A$1bn defence contract to provide communications services for the Australian Defence Department.

• 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>