Businesses face pressure to fill vacant positions. Photo / Getty Images
Keeping you up to date with the latest market moves, in association with Investment firm Jarden
New Zealand
The NZX 50 rose 0.6 per cent yesterday. It was a particularly good day for the index's large companies, with the NZX 10 up 0.9 per cent.
The official cash
rate (OCR) rose 25 basis points yesterday to 0.75 per cent following the Reserve Bank of New Zealand's Monetary Policy Review. The RBNZ's Monetary Policy Committee outlined they are balancing the need to control inflation and support the maximum sustainable level of employment with the uncertainties of consumer spending and business investment, as New Zealand transitions into a period of endemic Covid-19.
Sector-wise, utilities and financials rose 1.8 and 1.4 per cent, respectively.
Leading utilities upwards were electricity generators and retailers Meridian Energy and Mercury NZ, each gaining 4.2 and 2.2 per cent. The NZ 10-year bond rate fell 5.5 basis points yesterday after recovering from an early 10 basis point decline after the OCR release. This increase of the gentailers, as typical bond proxy stocks in the New Zealand market, was likely caused by the decline of the NZ 10-year bond rate.
Arvida Group increased a further 2.6 per cent after its results release on Tuesday.
The only sector to decline was consumer cyclicals, falling 0.8 per cent.
Vista Group International decreased 5.6 per cent. The film company may have lost ground following the broad decline of technology stocks the previous night in the US.
Pushpay Holdings fell 4.2 per cent, potentially still declining on the back of its result.
Easing off a year-to-date peak achieved on Tuesday, Tourism Holdings lost 3.1 per cent.
International
US
The major US indices were a mixed bag at the time of writing. The S&P 500 increased 0.1 per cent, the NASDAQ was up 0.5 per cent, while the Dow Jones decreased 0.2 per cent.
Despite headline index movements, markets were buoyed by a range of positive macroeconomic data, with US jobless claims falling below 200,000 last week. This marks the lowest point in more than 50 years, and considerably lower than consensus estimates, which had the figure around 250,000. Likewise, personal income and consumer spending were said to have come in higher than expected.
Sector gains include energy and real estate, each leading the way with 0.9 and 0.5 per cent increases.
These sector gains were well supported by the single stock winner Hewlett-Packard (HP), which posted a strong set of fourth quarter results. Earnings soared 52 per cent year-on-year to 94 cents per share, in combination with net revenues of over US$16.7 billion. HP traded higher by 9.8 per cent, at the time of writing.
Agricultural equipment manufacturer John Deere, known for their tractors, surged 5.5 per cent. Its earnings release showed increased demand across a range of its products.
In contrast, downward pressure on indices came from sector losses in materials (-0.7 per cent) and consumer staples (-0.4 per cent).
Earnings season appears to have been responsible for all the larger market moves this morning, including the biggest decliners. Apparel brand GAP and software company Autodesk endured large selloffs at 22.8 and 17.4 per cent, respectively. Both companies seem to have missed investor expectations with their quarterly results. More specifically for GAP, it was confirmed that shareholder rights firm Labaton Sucharow would be investigating the company for potential securities violations and breach of fiduciary duty, compounding pressure on the share price.
Rest of the World
The main Asian indices finished with mixed performance again overnight, the Shanghai Composite and Hang Seng advanced 0.1 per cent each, while the Nikkei lost 1.6 per cent when trading resumed after Tuesday's public holiday for Japanese markets.
Commodities
Among the commonly tracked commodities, gold continued its downward slide this week, as investors become more optimistic over strengthening economic data and the recent appointment of Federal Reserve Chair Powell. This has led to a move away from less risky assets. Gold now trades at US$1,788.2 per ounce.
Oil remained stable (-0.3 per cent) despite supply fluctuations amidst international reserve releases, with the WTI now priced at US$78.3 per barrel.
Similarly, the US 10-year treasury rate held around 1.65 per cent during this morning's trading.
Cryptocurrencies slipped again today, coming off their highs posted over a fortnight ago. Bitcoin lost 1.6 per cent to US$56,700, while Ethereum followed suit with a 3.0 per cent loss over the same 24-hour period, now trading at US$4,240.
Australia
The ASX 200 dropped slightly in Wednesday's session, closing 0.2 per cent lower.
Four out of seven sectors closed in the green, led by energy (+1.6 per cent) and utilities (+1.0 per cent). On the flipside, information technology (-0.5 per cent) and consumer discretionary (-0.4 per cent) were the biggest laggards.
The best performer on the ASX 200 yesterday was property group Lendlease, increasing 3.7 per cent and continuing its upward trend from over the past week.
Next in line was innovative medical device producer Polynovo, rising 2.8 per cent. The company's share price is less than half what it was at the end of 2020, currently A$1.47 compared to A$3.90 at the end of 2020.
Oil and gas explorer Beach Energy also performed well, up 2.8 per cent.
The stock experiencing the largest decline on the day was Technology One, dropping 8.6 per cent. Despite its Tuesday FY21 results being in line with expectations, the company received several broker downgrades.
Fund manager Pinnacle Investment Management Group traded 5.6 per cent lower, after announcing the successful completion of a A$150 million fully underwritten placement of approximately 6.3 million new fully paid ordinary shares. Simultaneously, executive director Adrian Whittingham sold down 875,000 shares at the placement price of A$16.70 per share. This price was 7.6 per cent lower than the 5-day volume weighted average price (VWAP) to 22 November 2021 of A$18.08. The proceeds will be used for Pinnacle's investment in Five V Capital, which was announced on Tuesday.
Rounding out the biggest decliners was superannuation platform provider Netwealth Group, declining by 5.6 per cent.
• For more information on the latest market moves, get in touch with Jarden.
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
Economic recovery is coming but won't solve structural problems.