Jarden Brief: US markets continue to claw back losses

Wall Street has recovered well after losses earlier in the week. Photo / Getty Images

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

New Zealand:

The NZX50 rose by a slim 0.1 per cent yesterday.

Consumer cyclicals and utilities rose 0.6 per cent. The worst performing sectors were consumer non-cyclicals and technology which fell by 1.2 and 0.6 per cent, respectively.
Goodman Property Trust was the top performer of the NZX50 yesterday, up 2.3 per cent. Electronic payments provider Pushpay Holdings also rose 2.3 per cent. Mercury NZ rose again following this week's release of the quarterly operational update, up 2.2 per cent.
On the flip side, Napier Port Holdings was the worst performer of the NZX50 yesterday, down 2.1 per cent. Synlait Milk fell by 1.8 per cent and A2 Milk fell by 1.6 per cent. These price moves were likely a reaction to the 2.9 per cent decline in the global dairy price index at this week's global dairy auction.

New Stats NZ data was released yesterday showing increasing household net worth and declining savings rates. The net worth of New Zealanders rose by over $400 billion to $2.3 trillion in the 12 months to March 2021, a rise nearing the combined increase of the previous four years. Net worth is a household's assets minus the household's liabilities. Household spending increased relative to savings, up 6.1 per cent in the March 2021 quarter, with the household savings ratio (comparing savings with disposable income) down to 0.4 per cent in the March 2021 quarter compared to 3.2 per cent in the December 2020 quarter.

INTERNATIONAL:
United States:

US markets continued to claw back losses earlier in the week this morning as the S&P 500, Nasdaq and Dow Jones Industrial Average are currently trading higher by the small margins of 0.2, 0.4, and 0.2 per cent at the time of writing.

Sector gains include Technology and Health, both leading the way with 0.6 per cent increases.

These sector gains were well supported by the single stock winner of the morning Dominos Pizza Inc which jumped 14.2 per cent after the pizza delivery company smashed its quarterly earnings and revenue estimates. Similarly, utility company First Energy outperformed (4.4 per cent at the time of writing) in the aftermath of the company settling a legal dispute. First Energy are now required to pay US$230 million for a bribery case, below what the market had priced in.

In contrast, downward pressure on indices was drawn from sector losses of Financials (down 1.0 per cent) and Real Estate (down 0.8 per cent).

Second quarter 2021 earnings dominated news flow this morning. Semiconductor manufacturer Texas Instruments, and Crown Castle Real Estate, both reported underwhelming financials to which investors reacted unfavourably, finishing down 4.7 and 4.3 per cent.

Rest of the World Markets:

Asian indices made significant gains overnight. Highlights included the Shanghai Composite, Nikkei, and Hang Seng making gains of 0.3, 0.6, and 1.9 per cent at the close.

Commodities

In commodities this morning, Gold was trading stronger by 0.2 per cent at US$1,807.1 per ounce. WTI crude oil pushed back above US$70 (now trading at US$71.77) as supply constraints re-emerge alongside a rise in global Covid-19 cases. Yields are also trading lower, with the US 10-year now priced at 1.27 per cent.

Lastly, Crypto currencies nudged forward with Bitcoin rising 1.7 per cent to US$32,288.1 and Ethereum up 3.9 per cent to US$2,023.9.

Australian Markets:

The ASX 200 set a new 20-day high in Thursday's session, closing 1.1 per cent higher.
The energy and materials sectors were the biggest gainers, increasing by 2.5 and 2.2 per cent, respectively. The only sector that was underperforming on the day was healthcare, decreasing 0.3 per cent.

Lithium and tantalum producer Pilbara Minerals was the top gainer of the session, rallying a further 10.1 per cent, recovering more than its losses made at the beginning of the week. Lithium producer, Orocobre, also had a strong performance, improving by 9.9 per cent. The market reacted favourably to the company's quarterly report for the period ending 30 June 2021, which showed that production was up 31.0 per cent on the previous corresponding period and sales revenue was up 22.0 per cent, quarter on quarter to US$21.6 million. The two best performers would have also gained from the news about the battery breakthrough by Li-S Energy, which says it was found a way to create lithium-sulphur batteries. These batteries can last longer and are lighter than the lithium-ion batteries used in electric cars and mobile phones. Li-S Energy is said to list on the ASX next month, with an expected market cap of AU$544 million, and a potential dual listing in the US.

Joining the other two on the leader board, was Lynas Rare Earths, rising 9.0 per cent. The rare earths concentrate producer has been awarded an AU$14.8 million grant by the Australian government as part of the Modern Manufacturing Initiative. This grant is said to enable Lynas to commercialise an industry-first Rare Earth carbonate refining process, which helps to produce a higher purity Rare Earth carbonate.

The biggest drop was recorded by Zip Co, dropping 7.8 per cent, although the buy now pay later company reported its positive quarterly results for the period ending 30 June 2021. There was a 104.0 per cent jump in revenue to AU$129.9 million and US revenue was up 280 per cent year-on-year at AU$64.3 million for the quarter. Next in line was online retailer Kogan.com, decreasing 3.2 per cent, followed by gold miner Evolution Mining, down 2.9 per cent. Evolution has bought a collection of Northern Star's mines for AU$400 million. The deal will be funded through an AU$400 million placement to institutional investors at a 5.4 per cent discount to Wednesday's share price. Furthermore, the company will offer a further AU$50 million of new shares to ordinary shareholders.

• 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>