Jarden Brief: US jobless claims fall to lowest number since before pandemic

Jobs data out of the US has been strong. Photo / Getty Images

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

New Zealand

The NZX50 slipped 0.1 per cent yesterday. Utilities and Healthcare both fell 0.7 per cent.
Financials and Industrials were in the green, rising 1.4 and 0.7 per cent, respectively. Heartland rose 2.1 per cent, leading the Financial sector upwards.

ANZ World Commodity Price Index rose 1.3 per cent in the month of May from the April figure to a record level. This is the eighth month in a row it has risen, in line with global commodity price rises since 2020. The rise was led by aluminium, up 5.6 per cent in May, and forestry, up 3.3 per cent in May.

Agricultural business Scales was the top performer yesterday, rising 2.8 per cent. The ANZ World Commodity Price Index released yesterday cited prices rising for new-season apples, the main export for Scales.

Restaurant Brands New Zealand, owner of fast food establishments including Pizza Hut and KFC, dropped 2.7 per cent as the worst performer yesterday. The performance of the stock in the past months has seen it almost recover to its pre-pandemic price.

INTERNATIONAL
US

US equities are trading down at the time of writing, with the Dow Jones Industrial Average falling 0.1 per cent, while the S&P500 and Nasdaq dropped 0.3 and 0.9 per cent, respectively.

This was despite the positive sentiment provided by US weekly jobless claims, which fell by 20,000 to 385,000 claims - the lowest figure since before the pandemic.
Outperforming sectors included Energy and Utilities which both made gains of 0.7 per cent.

Sector gains were buoyed by impressive performances from the automobile industry as both Ford Motor Co and General Motors Co have risen by 7.2 and 6.0 per cent respectively at the time of writing. Ford traded favourably ahead of a new vehicle unveiling on the 8th this month while General Motors released an update to the market saying first-half results would be significantly better than prior guidance.

In contrast, downward pressure on indices was drawn from sector losses of Consumer Cyclicals (-0.8 per cent) and Technology (-0.7 per cent).

Online marketplace Etsy led the single stock losers as it slumped to a 4.8 per cent loss at the time of writing. Joining Etsy was Tesla, which was volatile following an SEC (Securities Exchange Commission) investigation into CEO Elon Musk's use of Twitter and his ability to swing the market drastically.

Movie Theatre Company AMC Entertainment dominated news flow this week after its stock price surged +127 per cent to as high as US$70.0 on Wednesday, adding to gains of more than 3,000 per cent since January this year.

Like the notoriously volatile GameStop, media have reported that a high volume of retail traders, spurred on through social media platforms like Reddit, banded together to pump up the share price to squeeze short-sellers of the stock. AMC now has an estimated 80 per cent retail investor ownership. The stock is currently trading down 4.8 per cent today at US$59.20, compared to just above US$2 at the start of the year.

Asia

Asian indices were mixed overnight. Highlights include the Hang Seng and Shanghai Composite trading down 1.1 and 0.4 per cent each, while the Nikkei made gains of 0.4 per cent at the days' close.

Commodities

In commodities this morning, Gold is trading weaker by 1.9 per cent at US$1,874.60 per ounce after stronger than expected US jobless claims data led to investors allocating more of their portfolio towards debt and equities. WTI crude oil dipped a slim 0.1 per cent, now priced US$68.80 per barrel. Yields are trading up 0.03 percent at the time of writing, with the 10-year now priced at 1.625 per cent.

A quiet morning for crypto currencies, with Bitcoin advancing 1.9 per cent to US$38,590.5 and Ethereum adding 1.3 per cent to US$2,798.4. On the other hand Elon Musk favourite DogeCoin fell 7.2 per cent, now trading at US$0.4.

Australia

The ASX200 climbed another 0.6 per cent to 7260.1 points yesterday, continuing its strong momentum throughout the week.

Gains were carried by the Energy and Utilities sectors, increasing 3.3 and 2.1 per cent, respectively. Consumer Discretionary was the only sector which underperformed on the day and decreased by 1.1 per cent.

Financial services provider IOOF Holdings was the best performer of the day, rising 7.9 per cent, closely followed by Worley. The engineering services provider increased by 7.7 per cent, continuing its momentum from the previous session. Next in line was the electricity generator Origin Energy, up by 6.2 per cent.

The biggest underperformer of yesterday's session was betting platform Pointsbet Holdings (-4.2 per cent). Cement, lime and concrete manufacturer, Adbri Limited (-3.6 per cent), and gold miner Resolute Mining (-3.4 per cent) rounded out the next two worst performers of the day.

Bunnings has announced that it wants to increase its market share of the home and commercial construction market. Managing director Michael Schneider announced the company plans to open around 75 trade tools stores in Australia and New Zealand over the next three to five years and is looking to acquire further businesses.

At the same time, Chief Executive Rob Scott of Bunnings' parent company, Wesfarmers (-2.1 per cent), has raised concerns that the new hard lockdown in Victoria will have a negative impact on the group's already weaker sales and revenue numbers.

Although customers were splurging on hardware, technology, and homewares at the height of the pandemic last year, sales rates across Wesfarmers' various subsidiaries have been growing at a slower rate or even decreasing. If the lockdown continues for much longer, Wesfarmers might need to reassess its full year profit expectations.

Coming up Today:

Non-farm payrolls (to be released tonight) is set to be a pivotal data release for the Fed. The May print will likely give central bankers a better read on how quickly the labour market is recovering following the first wave of Covid, and whether there are any signs that inflation will continue to track up.

• 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>