Jarden Brief: Investor confidence hits highest level since 2013

The FMA's annual investor confidence survey showed optimism in the market. Photo / Getty Images

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

New Zealand:

NZ markets lagged on Wednesday with the S&P NZX50 trading down 0.1 per cent to finish at 12,747.8 points.

The FMA released its annual investor confidence survey on Wednesday. Highlights included 72 per cent of respondents claiming they have confidence in New Zealand's financial markets, which was up from 66 per cent in 2020 and its highest since the survey started in 2013. Moreover, 84 per cent of respondents have some form of investment in financial markets, with 23 per cent saying they made new, or increased existing, investments over the past financial year.

These results are said to be on the back of increased retail investor participation, with returns for new investors benefitting significantly during 2020, as markets sharply recovered from the Covid-19 crisis.

Sector gains included consumer non-cyclicals and technology, each leading the way with 1.5 and 0.4 per cent increases.

These sector gains were well supported by single stock winner, a2 Milk, which traded up 3.8 per cent in the aftermath of its acquisition of Matura Valley Milk (a small-scale competitor) being approved by the Overseas Investment Office earlier in the week. Fruit processor and distributor, Scales Corp, surged 3.0 per cent despite notice of a large share sell off from one of its directors, Andy Borland, who parted ways with over 230,000 shares.

In contrast, downward pressure on indices was drawn from sector losses for healthcare (down 1.1 per cent) and consumer cyclicals (down 1.0 per cent).

The poorest performer on the day was logistics company, Freightways, which slumped to a 2.7 per cent loss at yesterday's close. Joining Freightways was Goodman Property Trust, which fell 2.4 per cent after the company held its annual general meeting, which failed to invigorate investor expectations.

INTERNATIONAL:
United States:

This morning the S&P500 increased by 0.3 per cent, the NASDAQ was down 0.1 per cent, and the DJIA edged slightly higher, rising 0.1 per cent.

Energy was the only sector underperforming at the time of writing, decreasing 1.2 per cent. Materials and Industrials, on the other hand, were leading the markets higher, increasing 1.0 and 0.9 per cent, respectively.

The top gainer of the day was Oracle, rising 4.6 per cent, and hitting a new 52-week high. Joining the corporate IT products and services provider on the leader board were steel producer, Nucor, up 3.7 per cent, and used vehicle retailer, Carmax, up 3.1 per cent.
Electronic trading platform operator, Marketaxess Holdings, was the biggest loser, dropping 5.6 per cent. The company was correcting some of its gains from the previous session after reporting its preliminary quarterly results, ending 30 June 2021. Next in line was semiconductor manufacturer, Xilinx, decreasing 3.9 per cent, followed by gaming and racing facilities manager, Penn National Gaming, down 3.8 per cent.

Former president, Donald Trump, announced on Wednesday that he is filing a class-action lawsuit against Facebook (-0.3 per cent), Twitter (-1.5 per cent), and Google (+0.4 per cent), as well as their respective CEOs. The tech giants had banned Trump from their platforms after the January 6 riots in the Capitol. Trump alleges that with that move, they violated his First Amendment rights. Shortly after announcing the lawsuits, Trump's political entities started sending out fundraising messages to finance the litigation.

The Federal Reserve published its meeting minutes this morning. The policymaking group kept its benchmark in a range between 0.0 and 0.25 per cent, in line with market expectations. However, Chairman, Jerome Powell, said that there were discussions about slowing down the monthly bond purchases. Currently, the Fed is buying at least US$80 billion of treasuries and US$40 billion of mortgage-backed securities.

Rest of the World Markets:

The major Asian indices were a mixed bag again. The Nikkei declined 1.0 per cent, the Shanghai index rose 0.7 per cent, the Hang Seng was down 0.4 per cent, and the Shenzhen was up 1.9 per cent.

On Wednesday, Samsung (-0.5 per cent) published its preliminary results for the quarter ending 30 June 2021. The chip and smartphone maker indicated that profits for the quarter would be US$11 billion, beating analysts' estimates of US$10 billion. The preliminary result is a 33 per cent increase from the first quarter, reflecting the increased demand for chips. Revenue rose about 19 per cent compared to the same period in 2020.

Commodities

Gold kept up its upward momentum, increasing by 0.5 per cent to US$1,803.80 per ounce.

Oil dropped a further 1.9 per cent to US$71.96 and is likely to stay volatile amidst the tensions between Saudi Arabia and the UAE.

It was a good session for cryptocurrencies, which were all trading in the green at the time of writing. Bitcoin gained 2.4 per cent and Ethereum was up 2.0 per cent.

The US 10-year treasury rate slightly declined to 1.321 per cent.

Australian Markets:

The ASX200 rose 0.9 per cent yesterday in the first full trading day since the Reserve Bank of Australia announcement to hold the cash rate at 0.1 per cent.

In a reverse of Tuesday's trading, nine of 11 sectors closed higher. Information Technology was the top performer, up 2.8 per cent with Consumer Staples coming in second, rising 1.9 per cent yesterday. Energy fell 1.9 per cent.

Leading the ASX200 yesterday was retirement income and investment company, Challenger, up 8.8 per cent. This followed the news release that Athene Holding Limited agreed to acquire a 15 per cent minority interest in Challenger. The Challenger CEO commented that this was, "a strong endorsement of Challenger's market position and long-term growth prospects".

Telecommunications service provider, Uniti Group, rose 6.7 per cent and buy-now-pay-later provider, Zip, rose 6.0 per cent.

On the flip side, ultrasound company, Nanosonics, fell 4.8 per cent, coming down from recent highs at the end of last month. Whitehaven Coal fell 3.8 per cent, losing almost all of the previous day's gains, and Worley fell 3.0 per cent.

With community cases rising in New South Wales, the wider Sydney lockdown has been extended until Friday the 16th of July. This prolonged stay-at-home order is a headwind to the Australian Covid-19 recovery.

• 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>