Jarden Brief: Oil price drops due to global uncertainty

The surge in Delta cases has left markets uncertain. Photo / Getty Images

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

New Zealand:

The NZX 50 traded in the green on Wednesday, with the index rising 0.6 per cent to 12,718.9 points, recovering much of yesterday's losses, as New Zealand went into country-wide lockdown.

Investor sentiment was buoyed after the Reserve Bank of New Zealand (RBNZ) held the official cash rate at 0.25 per cent, citing the current Covid-19 outbreak. This reflected a quick turnaround of events, with a rate hike to, at least, 0.5 per cent expected before Tuesday's outbreak.

Leading sectors were healthcare and consumer non-cyclicals, making gains of 2.0 and 1.4 per cent respectively.

Exchange operator, NZX Ltd, led the way with a strong performance, up 2.8 per cent at the end of Wednesday's trading. NZX benefits from increased trading activity which is likely to continue over the short term as the market reacts to the ebbs and flows of Covid-19 related news and lockdown announcements.

Similarly, healthcare company, Fisher & Paykel Healthcare, traded strongly (up 2.5 per cent) after the company hosted its annual shareholders meeting and provided headline revenue data for the first four months of the year. Pacific Edge Technology also made a late run, with its bladder cancer product, 'Cxbladder', being cited for outperformance in its use as a home testing device by the highly regarded Journal of Urology.

On the flip side, energy (down 1.7 per cent) and consumer cyclicals (down 0.8 per cent) were the laggard sectors at yesterday's close.

Weighing down index performance was single stock loser, Vista Group International, which traded unfavourably (down 3.1 per cent) ahead of its earnings release next week.

Joining Vista was Kathmandu Holdings, which fell 2.3 per cent, as the company's retail stores will likely be affected by current lockdown restrictions. Earlier in the day, Kathmandu announced Brooke Farris as CEO of its recently acquired subsidiary, Rip Curl.

International Markets:
US:

The S&P 500 and DJIA were 0.1 per cent lower, while the NASDAQ increased 0.2 per cent, immediately after the Fed released the minutes from its 27 July meeting. Short-term interest rates will stay near zero, and the committee said that the move towards sustainable inflation (around 2.0 per cent) and full and inclusive employment was well underway.

At the time of writing, the consumer discretionary sector was trading higher, up 0.8 per cent. The biggest decliners were real estate (-0.9 per cent) and consumer staples (-0.9 per cent).

Home improvement store, Lowe's Companies, was the best performer, rallying 10.6 per cent. The company beat analysts' expectations on its earnings report, with revenue of US$27.6 billion and earnings per share of US$4.25. These are 1.0 and 14.0 per cent year-on-year improvements.

CBOE Global Markets hit a new 52-week high. The trading and investments solution provider increased by 8.3 per cent. Rounding out the top performers was the off-brand apparel and home fashions retailer, TJX Companies, rising 6.0 per cent. The company fared well after its earnings announcement before market open.

The worst performers were infection prevention company, Steris, down 3.3 per cent, and Jack Henry & Associates, down 3.2 per cent. The company provides information processing solutions to community banks. Organon & Co also underperformed. The pharmaceutical company decreased by 3.0 per cent.

On Wednesday, T-Mobile US (-0.1 per cent) revealed that personal data of more than 40 million former and prospective customers was stolen in a data breach. The investigation had shown that social security numbers, drivers' licence information, as well as dates of birth and first and last names were stolen. Allegedly, the retrieved data was up for sale on an underground forum. This was the latest cyber attack after a number of high-profile companies and some local governments and institutions had already fallen victim to hackers taking advantage of weakened security measures, due to work-from-home set ups around the globe.

Rest of the World Markets:

Asian markets turned things around overnight and were all posting gains. The Nikkei improved by 0.6 per cent, the Shanghai index was up 1.1 per cent, the Hang Seng increased 0.5 per cent and the Shenzhen gained 0.7 per cent.

Commodities:

Gold increased by 0.2 per cent to US$1,790.60 per ounce.

Oil decreased further due to global uncertainty regarding demand, down 1.2 per cent to US$65.81 per barrel.

Cryptocurrencies were a mixed bag. Bitcoin crept slightly higher, up 0.2 per cent, while Ethereum decreased by 1.6 per cent.

The US 10-year bond rate edged slightly higher to a 1.282 per cent yield.
Australian Markets:

The ASX 200 fell a slim 0.1 per cent yesterday on another record day of New South Wales Covid-19 case numbers (633).

The property and utilities sectors rose 1.9 and 1.6 per cent respectively, while materials and energy fell 3.0 and 0.5 per cent respectively. Reporting season continued.

Pro Medicus surged 15.7 per cent on the back of a full year earnings announcement. Revenue increased 19.5 per cent (to A$67.9 million) after winning several large contracts. Net profit grew 33.7 per cent (to 30.9 million).

Domino's Pizza Enterprises was another outperformer, up 7.1 per cent. It was announced in the full year 2021 results that net profit after tax rose 29.2 per cent. Investors will also appreciate the 45 per cent increase in full year dividend on 2020, to A$1.73 per share.
BHP Group fell 7.1 per cent. EBITDA for the 2021 financial year rose 69 per cent, underpinned by strong iron ore prices.

SIMS declined by 5.8 per cent. In the full financial year 2021 results, sales revenue rose 20.5 per cent (to A$5,916.3 million) with a final dividend of A$0.30 per share.

• 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>