Jarden Brief: Spending grows quickly as Australian lockdown restrictions relax

Australia made the decision roll back restrictions. Photo / Getty Images

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

New Zealand

The NZX 50 continued its decline yesterday, decreasing a further 0.3 per cent.
Yesterday evening, Covid-19 Response Minister Hipkins announced that the northern part of Northland would move into alert level 3 at 11.59pm that night until midnight on Monday 8 November. This move is due to new unlinked cases.

The region also has relatively low vaccination rates when compared to the rest of New Zealand.

The effect of the lockdowns on businesses is beginning to show, with data from credit bureau Centrix showing credit defaults in Auckland up 18 per cent versus 2019, and Northland defaults up 12 per cent.

This morning's Global Dairy Trade auction has shown continued recovery, with another increase - a 4.3 per cent climb in commodity prices. Whole milk powder rose 2.7 per cent, butter gained 4.7 per cent, and skim milk powder recorded a 6.7 per cent gain. Cheese was the standout performer, rising 14.1 per cent.

Healthcare was the only sector in the green, up 0.4 per cent, buoyed by index heavyweight Fisher & Paykel Healthcare, rising 1.1 per cent.
On the other hand, financials (-2.7 per cent) and real estate (-1.3 per cent) booked the biggest losses on Tuesday.

Genesis Energy has signed up for a $100 million sustainability backed loan, which will see it face financial penalties from the issuer Westpac if certain environmental targets are not met.

The best performer of the day was outdoor retailer Kathmandu Holdings, rising 1.3 per cent. Agri-manufacturer Skellerup Holdings had another good day, increasing by 1.3 per cent. Rounding out the day's leader board was agribusiness Scales Corporation, up 1.1 per cent.

On the flipside, Stride Property decreased by 2.5 per cent, closely followed by Goodman Property Trust, down 2.2 per cent. These downward moves are likely due to rising interest rates over the last few days.

Sky Network Television also underperformed, declining by 2.1 per cent.

International                                                                                         
US

At the time of writing, the S&P 500 was up 0.4 per cent to a new record high, the Nasdaq was trading up 0.5 per cent, and the Dow Jones Industrial Average had increased 0.2 per cent as the market awaits the Federal Reserve meeting result.

Results season continued in the US.

Software company Arista Networks shot up 19.8 per cent to a new 52-week high after reporting its third quarter results. Adjusted earnings per share rose 22.3 per cent to US$2.96, exceeding consensus estimates of US$2.73 per share. Service revenue rose 15.5 per cent and total revenue increased 23.7 per cent.

Under Armour rose 17.3 per cent, also reporting its third quarter results and increasing its full year outlook. Earnings per share came in at $0.31 per share compared to a consensus $0.15 per share. The company said that it anticipates sales will rise 25 per cent for the full 2021 financial year compared to 2020.

Health and materials were the leading sectors, rising 1.1 and 0.9 per cent, respectively. 
Exerting the greatest downward sector pressure was consumer discretionary and energy, falling 0.9 and 0.8 per cent, respectively.

Global Payments fell 10.2 per cent. The financial technology firm's share price declined despite slimly beating earnings expectations. The company reported US$2.18 adjusted earnings per share compared to a consensus US$2.14.

Mosaic declined 9.8 per cent. The crop nutrients company missed third quarter earnings expectations with adjusted earnings per share US$1.35 compared to a US$1.54 consensus.

The recently renamed Meta (formerly Facebook) announced it plans to shut down its facial recognition program. The change will impact more than a third of its daily users in no longer recognising people's faces in photos or videos. One billion existing facial recognition templates will be deleted. The share price was down 1.3 per cent at the time of writing.

Rest of the world

In commodities this morning, gold dipped 0.3 per cent to US$1789.90 per ounce. WTI crude oil declined 0.4 per cent to US$83.71 per barrel. The US 10-year bond is trading at 1.544 per cent. In cryptocurrency, Bitcoin rose 4.3 per cent and Ethereum gained 3.4 per cent.

Australia

Australian equities slipped 0.6 per cent yesterday with the S&P/ASX 200 now trading at 7324.3 points.

On Tuesday, a range of positive spending data was released relating to the wider Australian economy. Lifting of lockdown restrictions in both Sydney and Melbourne saw ANZ spending data increase 38 and 32 per cent in each city compared to the prior fortnight. Furthermore, Commonwealth Bank spending data for the week ended 29 October was 20 per cent higher than the corresponding week in 2019, indicating spending may be bouncing back to pre-Covid levels as Australians begin to move away from lockdowns.

Sector gains included educational services and real estate, each leading the way with 3.0 and 1.4 per cent increases, respectively.

The property sector performed well, despite the prospect of an early interest rate hike being raised by the Reserve Bank of Australia. Overall index movements were well supported by industrial property company Goodman Group, which traded higher by 5.6 per cent at the close. Goodman upgraded its earnings guidance from 10 cents per share to 15 cents per share for the full year 2022. Similarly, Charter Hall traded favourably (up 3.3 per cent) as the investment and infrastructure company received a series of broker upgrades during the earlier stages of this week.

On the other hand, markets were weighed down by both the materials and financials sectors, which fell 2.1 and 1.2 per cent at the end of Tuesday's trading.

Single stock decreases consisted of mining and exploration companies Whitehaven Coal (-9.5 per cent), IGO ltd (-8,4 per cent), and Champion Iron (-7.2 per cent). All three companies drifted lower amongst a widespread cooling in commodity markets after underlying metals and materials shifted to record highs over the past few months. Furthermore, Champion Iron released quarterly operating statistics, while IGO also had its monthly presentation, both appear to have underwhelmed stakeholders.

• 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>