Elon Musk is fighting controversy on several fronts. Photo / Getty Images
Keeping you up to date with the latest market moves, in association with Investment firm Jarden
New Zealand
The NZX 50 fell 0.3 per cent yesterday with 80 per cent of companies finishing the day in the red.
The first Reserve Bank of New Zealand (RBNZ) Monetary Policy Committee meeting of the year occurs today. The market expects the Official Cash Rate (OCR) to rise 25 basis points to 1.0 per cent, with a 25 basis point rise priced into the Overnight Index Swap rate. There is potential for a 50-basis point hike although Omicron is one of the factors that could prevent the RBNZ from tightening monetary policy to that extent today.
Pacific Edge fell 5.9 per cent. Priced at $0.96 at the time of writing, Pacific Edge has experienced a share price decline since its recent $1.56 September peak. EROAD lost 3.9 per cent. The GPS technology company has also slumped in share price since last year, down from a July peak.
NZX was also an underperformer, down 3.7 per cent. It announced the opening of its Retail Entitlement Offer yesterday.
On the flip side, Meridian Energy outperformed, up 4.3 per cent, Tourism Holdings rose 2.3 per cent and EBOS increased 1.2 per cent.
RBNZ reported data showing New Zealand credit card balances continuing to fall, down 6.2 per cent in the year to January 2022, now at the lowest level since January 2013. Currently only 51.7 per cent of all balances incur interest, the lowest level since this series started more than 20 years ago.
In its quarterly outlook report Westpac downgraded annual economic growth expectations for 2022 from 3.8 per cent to 3.0 per cent, pointing to a slower comeback for tourism and hospitality coupled with higher inflation and interest rates.
International
US
The US markets resumed trading after being shut for President's Day on Monday. The major US indices started the trading week lower, with the S&P 500 decreasing 0.7 per cent, the Dow Jones Industrial Average declining 0.9 per cent, and the NASDAQ trading 1.2 per cent lower.
Utilities and real estate were the only two sectors in the green at the time of writing, rising 0.5 and 0.1 per cent, respectively. Leading the markets lower were consumer discretionary dropping 3.0 per cent, and materials down 1.0 per cent.
Medtronic was the single stock best performer on the S&P 500 on Wednesday morning, gaining 3.7 per cent. The medical technology and services company announced third-quarter earnings before market open to which investors seem to react positively, despite the company missing revenue forecasts. However, its adjusted quarterly profit came in just ahead of estimates at US$1.37 per share and the company said it is seeing improved procedure volumes.
Next in line was global food and beverage company Kraft Heinz increasing 3.5 per cent, continuing its most recent upward trend.
Rounding out the top performers was fashion company Ralph Lauren, up 3.3 per cent. Speculatory reports have circulated about the company allegedly being in on-and-off talks with Moët Hennessy Louis Vuitton (LVHM) about a potential acquisition by LVHM.
Leading the index lower was Home Depot dropping 8.9 per cent. The home improvement retailer's shares declined despite reporting better than expected earnings and revenue for its fiscal fourth quarter.
Consumer technology products and services provider Best Buy also underperformed, losing 7.4 per cent, hitting a 52-week low.
Tesla joined the bottom movers, decreasing 5.9 per cent. The CEO of the electric car maker, Elon Musk, accused the Securities and Exchange Commission of leaking information about a federal investigation. Musk's attorney wrote a letter stating the commission would be retaliating against Musk for publicly criticising the federal financial regulators. Additionally, Tesla's autopilot feature is under investigation by Germany's Federal Motor Transport Agency.
Rest of the World
All of the major Asian indices underperformed overnight. The Shanghai Composite lost 1.0 per cent, the Nikkei traded 1.7 per cent lower and the Hang Seng dropped 2.7 per cent.
On Tuesday, China's Finance Minister Liu Kun said that the government will cut taxes and fees on a greater scale this year and focus on the nation's technology development.
Commodities
Commodities performed well on Wednesday morning, with the exception of copper, which declined 0.3 per cent to US$4.51.
Gold rose 0.2 per cent to US$1,904.60 per ounce, while silver gained 1.2 per cent to US$24.28.
Oil traded 1.8 per cent higher to US$92.71, likely due to Russian President Vladimir Putin ordering forces into two breakaway regions in Ukraine, which intensified the situation.
Cryptocurrencies traded lower across the board. Bitcoin declined 1.2 per cent and Ethereum lost 1.6 per cent.
The US 10-year treasury rate remained relatively unchanged, yielding 1.942 per cent, at the time of writing.
Australia
Australian equities were also weighed down by the potential ramifications of a Russian invasion of Ukraine, with the ASX 200 index falling 1.0 per cent to 7,161.3 points.
Victorian premier Daniel Andrews confirmed that work from home and compulsory mask orders in offices will be lifted from 11:59pm this Friday. This followed in the footsteps of New South Wales (NSW), which announced a similar change last week. The easing of restrictions will likely help support small businesses based in and around the Melbourne CBD area.
Energy (+1.9 per cent) and consumer staples (+1.8 per cent) were the leading sectors against the run of play.
Healthcare device manufacturer Cochlear (+9.0 per cent) exceeded investors' expectations after posting first half results for the fiscal year 2022. Revenue (excluding foreign currency movements) of A$815.3 million and net profit of A$217.6 million were well ahead of consensus estimates as the company maintained guidance for the second half of its financial year.
Fruit and vegetable grower Costa Group and investment advice company HUB24 each advanced 8.7 and 4.8 per cent - both moved after their respective results seemed to impress investors.
On the other hand, technology and consumer discretionary were the underperforming sectors on Tuesday, slipping 3.2 and 2.7 per cent, respectively.
Headline earnings affected stock movements in both directions, with healthcare company Nanosonics being Tuesday's largest underperformer, down 13.1 per cent. Investors were unhappy with the company's future profitability, despite HY22 revenue increasing 41 per cent to A$61 million. Rounding out the single stock bottom movers were metals exploration company Liontown Resources (-10.8 per cent) and Tyro Payments (-10.2 per cent).
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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
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