Jarden Brief: US Covid cases fall to lowest level since March 2020

The US vaccine rollout has been hugely successful. Photo / Getty Images

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

New Zealand

The NZX50 rose 1.1 per cent yesterday to round out the month down 3.5 per cent. Gains were driven by the real estate and healthcare sectors, rising 1.7 and 1.5 per cent, respectively. The only sector to decline was the financials sector, down 0.2 per cent.

Port of Tauranga was the top performer yesterday, up 3.9 per cent. This did not appear to be linked to any news, and the price movement may have been due to the stock's generally thin liquidity.

Campervan rentals company Tourism Holdings was another outperformer of the NZX50 yesterday, up 3.6 per cent. The stock price is just shy of last week's high, following a dip likely caused by the Victoria lockdown announced late last week.

Cinema software provider Vista Group International fell 1.4 per cent yesterday, after it announced the results of its Annual Meeting of Shareholders on Thursday. A notable change was the maximum aggregate annual remuneration payable to Non-Executive Directors, which was increased to $725,000 from $500,000. This was the most opposed resolution, with 16.3 per cent of the votes against it.

Synlait Milk increased forecast milk base price from $7.20 per kg of milk solids to $7.55 per kg of milk solids, citing strong Chinese demand and matching Fonterra's midpoint which was announced last week. Synlait also matched Fonterra's open forecast for the 21/22 Farmgate Milk Price at $8.00 per kg of milk solids.

Manuka honey company King Honey has been sold to NZX listed company Me Today. The company was purchased for $36 million, with plans for a $15.75 million capital raise to assist in funding the investment. Me Today rose 10.8 per cent yesterday.

In macroeconomic news, the ANZ Business Outlook was released yesterday. Business confidence rose four points to +1.8 per cent in May, with firm activity rising five points from April to +27.1 per cent. However, inflationary indicators were also higher. 81.3 per cent of respondents reported higher costs, indicating upward pricing pressure and inflation expectations.

Canterbury's severe flooding from the weekend continued yesterday, following a deluge of rain across the country and a 'red alert' declaration by MetService. This extreme weather event has flooded highways, towns, farmlands and washed-out roads - the most rain experienced in the region in 10 years.

INTERNATIONAL
US

US markets are closed this morning for Memorial Day. There was some good news to go along with a national public holiday this weekend as new Covid-19 cases fell to the lowest levels since March 23 2020. Just 11,976 new cases were reported for the day, much less compared to new cases in excess of 200,000 during the peak of the pandemic.

Asia

A release of macroeconomic data over the weekend included China's Purchasing Manufacturers Index (PMI) for the month of May, with the index reading roughly unchanged at 51.0 compared to last month and in line with expectations. It was a similar story for Japan which saw retail sales during April rise 12 per cent compared to the same month last year, although this was soft against market expectations of +15.3 per cent.
Overall, Asian indices were mixed overnight. Highlights include the Hang Seng rising a slim 0.1 per cent, the Shanghai Composite up 0.4 per cent, and the Nikkei making a loss of 1.0 per cent at the days close.

Commodities

In commodities this morning, Gold is trading stronger by 0.2 per cent at US$1,909.5 per ounce on the back of continued inflationary pressure. WTI crude oil is also on the rise, now priced at US$66.91 per barrel (a 0.9 per cent increase from yesterday). Yields are trading down this morning despite the inflationary outlook, with the 10-year now priced at 1.58 per cent (down from 1.61 per cent yesterday)

Australia

The ASX200 decreased by 0.3 per cent, with the market increasingly worried about a potential extension of the Victoria lockdown, given the continued rise in cases over the weekend. Despite the dip, the ASX200 recorded a 1.9 per cent gain for the month due to an improved economic outlook.

The Energy sector was the biggest loser in yesterday's session, decreasing 1.6 per cent, followed by Information Technology, down 0.9 per cent. Health Care (+0.5 per cent), Materials (+0.2 per cent) and A-REIT (+0.1 per cent) were the only sectors trading in the green.

Gold miner Resolute Mining rose 4.3 per cent, followed by mineral exploration company Perseus Mining, up 3.6 per cent. Rounding out the top performers of the day was Inghams, increasing 3.5 per cent. The poultry producer continued its rally, kicked off by a positive earnings update and guidance announced last Friday.

After a cyber-attack on Australia's biggest meat and food processing company over the weekend, export giant JBS Foods was forced to cancel all cattle and lamb processing operations. The company has operations in Australia, the US, Canada and other countries, which have all been affected by the attack. Its Australian operations employ about 11,000 people and produce AU$4 billion in exports.

The worst performer of the day was software developer Nuix, plummeting 17.8 per cent. New earnings guidance announced yesterday revised earnings to an expected range of AU$173 million to AU$182 million, versus AU$180 million to AU$185 million published in its April forecast.

Link Administration Holdings also underperformed, decreasing 6.8 per cent. The market registry provider will continue to pursue the IPO of PEXA, an online property conveyancer which is valued at AU$3.3 billion after a snap book build last Friday. Link currently holds a 44.2 per cent stake and is said to increase this slightly, while Morgan Stanley Infrastructure partners has agreed to sell its entire 40 per cent stake.

Coming up Today:

No company announcements are planned for release, although we will see a number of macroeconomic data reports come out overseas – most notably the Eurozone consumer price inflation.

Manufacturing indices are set to be announced for the US, China and Australia – a leading indicator for how production is expected to measure up. US construction spending and Australian building approvals numbers will also be released.

• 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>