Jarden Brief: Sea of red on US markets this morning

Nerves are growing on Wall Street. Photo / Getty Images

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

New Zealand:

New Zealand markets traded in the red on Tuesday as the S&P/NZX 50 lost 0.4 per cent to 13,174.4 points.

Trading was influenced by the release of draft legislation by the Government, detailing the upcoming tax changes for housing investors that were announced in March. Included among the details is a 20-year exemption for new builds under the rules that will stop most landlords deducting home loan interest payments from their taxable property investment income.

Leading sectors comprised of both consumer non-cyclicals and energy, each making gains of 1.9 and 0.6 per cent, respectively.

Agricultural company Scales Corporation led the way with a strong performance to close the day's trading up 4.0 per cent. The stock continued a strong period of momentum following its half year earnings release in late August. Similarly, a2 Milk Company extended gains of 3.3 per cent amongst increased optimism within the New Zealand dairy industry after its supplier, Synlait Milk (+ 2.5 per cent), posted its own full year result on Monday, setting a clearer path toward earnings recovery.

On the flipside, healthcare (down 1.7 per cent) and consumer cyclicals (down 0.8 per cent) were the laggard sectors of the day.

Large cap freight company Mainfreight lost 2.2 per cent, adding to downward momentum.

International Markets:
US:

At the time of writing, all three major US indices were trading in the red. The S&P 500 decreased 2.0 per cent, the NASDAQ declined 2.7 per cent and the Dow Jones Industrial Average (DJIA) was 1.6 per cent lower. Yield hikes were impacting market sentiment as investors are expecting that the Fed will likely taper its bond-buying stimulus soon.

Energy was the only sector trading higher, up 0.7 per cent. All other sectors were underperforming, with communication services and technology booking the biggest losses, each down 2.9 per cent.

Companies providing technology, products, and services to the oil and gas industry were the best performers this morning. Schlumberger N.V. increased 4.0 per cent and Halliburton traded 2.6 per cent higher, both benefitting from the elevated oil and natural gas prices.

Rounding out the leader board was software company Hewlett Packard Enterprise, up 2.3 per cent. The company said it would offer a series of new cloud services for the HPE GreenLake edge-to-cloud platform.

The worst performer, at the time of writing, was Applied Materials, decreasing 6.6 per cent. The company provides manufacturing equipment, services, and software to the global semiconductor industry.

Next in line was finance company MSCI, declining 6.0 per cent, followed by online marketplace Etsy, down 6.0 per cent.

The S&P CoreLogic Case-Shiller US National Home Price Index, published yesterday, recorded its greatest monthly increase since it was established in 1987. The July data showed that home prices grew at an annual rate of 19.7 per cent, up from 18.7 per cent in June. This drastic increase in home prices has been linked to rising material costs, limited supply and demand caused by the Covid-19 pandemic.

Rest of the World Markets:

Asian indices delivered mixed trading session results overnight, with the Nikkei declining 0.2 per cent, the Shanghai composite increasing 0.5 per cent, and the Hang Seng trading 1.2 per cent higher.

Commodities:

Gold slightly decreased by 0.9 per cent to US$1,736.70 per ounce.

The oil price also saw a slight decline, down 0.7 per cent, to US$74.92 per barrel.
Cryptocurrencies continued their decline across the board. Bitcoin decreased 4.6 per cent and Ethereum dropped 6.4 per cent.

The 10-year US treasury rate broke the 1.5 per cent level and was yielding 1.534 per cent at the time of writing. This is highest level since June.

Australian Markets:

The S&P/ASX 200 lost 1.5 per cent yesterday. Healthcare and basic materials led the index downwards, falling 3.5 and 2.4 per cent, respectively.

Healthcare company Pro Medicus fell by 6.7 per cent to a three-month low. Evolution Mining declined by 6.5 per cent. The gold mining company was hurt by lower gold prices on Tuesday. Xero lost 6.4 per cent. The accounting software company fell victim to yesterday's technology selloff in the US.

Rising 4.0 per cent and 0.4 per cent were energy and utilities, the only sectors to improve.
Beach Energy and Oil Search led on the flipside, up 10.5 and 7.1 per cent, respectively.

Both oil companies are beneficiaries of rising oil prices. Beach Energy had its full year investor presentation yesterday, noting committed growth, low gearing, and stable gas revenues.

Whitehaven Coal increased by 6.5 per cent in line with increasing coal prices, recovering from yesterday's 2.5 per cent decline.

The ANZ-Roy Morgan Consumer Confidence survey increased for the third consecutive week to 103.7 (up 0.4 points). Of those surveyed, 28 per cent said their families were 'better off' financially compared to this time last year, and the same amount, 28 per cent conversely say their families are 'worse off financially'.

• 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>