Jarden Brief: More than $130 billion wiped off crypto markets

There's been a big sell-off in high risk investments. Photo / Getty Images

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

New Zealand

New Zealand markets fell yesterday, with the S&P/NZX 50 declining by 1.3 per cent to 12,191 points. This followed the country's move to the Red Covid-19 traffic light setting. It could also be linked to the US markets dropping.

Only four stocks on the index made a gain. Healthcare companies Fisher and Paykel Healthcare and EBOS posted 3.4 and 0.9 per cent wins with investors reverting to the same stocks that fared well throughout the first two outbreaks. Infrastructure company Vector (+0.5 per cent) and Restaurant Brands (+0.1 per cent) were the other two stocks in the green.

Negative sentiment flooded the market, with the day's biggest underperformers being freight technology company EROAD (-7.7 per cent), electricity technology company Serko (-6.0 per cent), and the Fonterra Shareholders' Fund (-4.8 per cent).

The government announcement of New Zealand's move to Red included confirmation that domestic border restrictions will not be imposed, allowing most scheduled domestic flights to continue as planned. Directly affected by this news was Air New Zealand, which finished the day down 3.1 per cent, along with its peer Auckland Airport(-2.9 per cent).
Highlights from the end of last week also include Meridian Energy's operation stats for the first half of 2022 (six months to December 2022) with the headline figure being EBITDA (Earnings before interest taxes, depreciation and amortisation) of $418 million, $1 million lower than the same figure in 2021.

International                                                                                         
US

The US markets started the week off with continued major selloffs as investors seem to be nervous about Federal Reserve policy tightening and tensions in Ukraine. The S&P 500 dropped 3.7 per cent, the Dow Jones Industrial Average (DJIA) declined 2.9 per cent, and the NASDAQ plummeted 4.7 per cent, at the time of writing.

All sectors underperformed with technology and consumer discretionary booking the biggest losses, decreasing 4.8 and 4.1 per cent, respectively.

The single stock best performer on the S&P 500 was food retailer Kroger, rising 1.9 per cent. The company recovered some of the losses made last week, following media reporting about the end of strikes at 78 Kroger-owned grocery stores in Denver.

Next in line was discount variety store operator Dollar Tree, increasing 1.6 per cent.
Rounding out the leader board was wireless communication services provider T-Mobile US, up 1.3 per cent, at the time of writing.

On the flip side, vaccine producer Moderna dropped 12.9 per cent. This could be linked to news that the EU's drug regulator is said to decide about approval for Pfizer's Covid-19 treatment at the end of this month. Merck is producing a similar drug, however, less effective, and is also awaiting final review from the regulator.

Netflix continued to underperform, decreasing a further 10.8 per cent, hitting a 52-week low. The streaming services provider released its fourth quarter 2021 results at the end of last week, to which the market reacted unfavourably.

Xilinx also underperformed, declining 10.4 per cent. The company designs and develops programmable devices and associated technologies.

Later this week the Federal Open Market Committee will release its rate decision, the US fourth quarter GDP results are set to be released, and the latest pending home sales and initial jobless claims will be published.

Rest of the World

In contrast to US markets, the major Asian indices traded slightly higher overnight. The Shanghai Composite rose 0.1 per cent, the Nikkei was up 0.2 per cent, and the Shenzhen increased 0.4 per cent. Solely the Hang Seng underperformed, decreasing 1.2 per cent.

Commodities

The big equity selloff was likely the reason for a slight improvement in the gold price, which was 0.2 per cent higher this morning, coming in at US$1,835.30 per ounce.
Oil dropped 3.5 per cent to US$82.20 per barrel.

Cryptocurrencies were trading in the red across the board. Bitcoin decreased by 1.7 per cent and Ethereum dropped 6.3 per cent. The crypto market wiped about US$130 billion off its value over the last day, which is said to be linked to the selloff in higher risk equities.

The US 10-year treasury rate remained relatively unchanged, yielding 1.728 per cent, at the time of writing.

Australia

The ASX 200 reached a new 100-day low yesterday with a 0.5 per cent decline.
Information technology took the biggest hit, down 1.6 per cent following a weak week for technology stocks in the US. Utilities was the second worst performing sector declining 1.3 per cent.

Regis Resources slumped 14.3 per cent. It released its results for the quarter ended 31 December and a guidance update. It outlined a geotechnical incident and other operational challenges impacting production levels, expecting lower production in the 2022 financial year.

Biotech company Imugene was another underperformer, falling 9.0 per cent throughout the day. Last week it announced the retirement of its Chief Medical Officer.
On the flip side, A-REIT increased 1.4 per cent and consumer staples increased 0.4 per cent.

REIT Uniti Group increased 9.3 per cent, with the company releasing an update to the market. Uniti Group reiterated that it is proposing to undertake an on-market share buyback and noted that it had received approaches from more than one party indicating potential interest in an acquisition of the Company.

Goodman Group gained 3.5 per cent on what appears to be no news.

The HIS Markit Flash Australia Composite PMI data for January shows private sector output declined with the current Omicron wave. Output levels fell to 45.3 compared to 54.9 in December and employment levels were unchanged in January, while business optimism eased to the lowest level since April 2020.

• 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