The car company is tipped for a valuation in excess of US$20 billion. Photo / Getty Images
Keeping you up to date with the latest market moves, in association with Investment firm Jarden
Coming Up Today:
The US will release Producer Price Index numbers and Initial Jobless Claims numbers. New Zealand incubated Fintech company, Xero, will release its full year earnings. Closer to home, Goodman Property and Tilt Renewables will also release their full year earnings.
New Zealand:
New Zealand equities traded lower at yesterday's close with the S&P/NZX 50 finishing the day down 0.6 per cent to 12,564.21 points.
Yesterday's headlines featured confirmation that telecommunications company, Two Degrees, would list on both the NZX and ASX before the end of this year. Two Degrees' Canadian parent company, Trilogy International Partners, is looking to capitalise on a strong full-year result for Two Degrees. Proceeds from the listing will go toward shoring up Trilogy's balance sheet.
Spark NZ, a listed telecommunications competitor, was down a slim 0.1 per cent on the day.
There were no sector gains for the day however, going against the grain was single stock winner, Ryman Healthcare Ltd. The aged care provider traded favourably (jumping 3.5 per cent) ahead of its full year results on the 21st of this month. Joining Ryman was dairy co-operative, Fonterra Shareholders Fund, which also rose 3.3 per cent, offsetting some losses sustained over the last 3 weeks.
In contrast, downward pressure on indices was drawn from sector losses for Energy (down 1.8 per cent) and Financials (down 1.6 per cent).
The day's underperforming stocks included agricultural products manufacturer, Skellerup Holdings Ltd, and Napier Port Holdings Ltd, falling 4.3 and 3.4 per cent respectively.
It was a volatile day for dairy exporter, A2 Milk, which saw an intra-day high of $6.60 before falling back to its opening price of $6.19. The market was briefly buoyed by news that the company would not fall out of the influential MSCI World Index – a key reference point for asset allocators. The next testing point for index inclusion will come in 6-months' time.
INTERNATIONAL:
US Markets
All major US indices were recording their biggest losses within the last month. At the time of writing, the S&P500 (1.7 per cent) fell for the third day in a row, after hitting an all-time high last Friday. The NASDAQ dropped 2.3 per cent and the DJIA was down 1.4 per cent. The markets did not take well the Consumer Price Index for April rising 4.2 per cent (year-on-year), the biggest hike since September 2008. Economists had expected a big number of 3.6 per cent, but the actual results released yesterday were a surprise.
Energy (+1.8 per cent) was the only sector in the green, while all others were taking a hit.
The worst performing sectors on the day were Consumer Discretionary (-3.0 per cent) and Information Technology (-2.8 per cent).
The best performing company at the time of writing was consumer cyber safety business, NortonLifeLock Inc (+7.2 per cent), hitting a new 52-week high, on the back of an upgraded rating by Bank of America from Underperform to Buy and a lift of the target price from US$19 to US$30. Next in line was oil and gas exploration and production company, Occidental Petroleum Corp (+4.2 per cent), with the third best performer being independent petroleum refiner, Valero Energy Corp (+4.1 per cent).
The worst performing equities on the day included slot machine operator, Penn National Gaming (-7.7 per cent), followed by gaming and hospitality firm, Caesars Entertainment (-6.7 per cent), and electronics manufacturer, Applied Materials Inc (-6.4 per cent).
Asian Markets
The popular Asian indices were generally up at time of writing. The Shanghai Index (China) was up 0.6 per cent; the Shenzhen Index (China) was up 0.7 per cent; and the Hang Seng (Hong Kong) Index was up 0.8 per cent. Only the Nikkei (Japan) was in the red, decreasing 1.6 per cent.
Amazon (-2.2 per cent) won a court appeal against the European Union regarding a US$300 million tax bill. According to the EU's general court, the European Commission failed to prove that Luxembourg had given Amazon an illegal tax advantage. This was the same outcome last July, when the EU argued that the Irish government had given Apple (-2.6 per cent) a tax advantage.
Volvo Cars said it is considering an IPO on the NASDAQ Stockholm stock exchange later this year, which could value the company at around US$20 billion. The Swedish carmaker has been under successful Chinese ownership for over a decade.
Commodities
Gold was trading at US$1,820.80 per ounce (-0.8 per cent); while silver was trading at US$27.24 per ounce (-1.5 per cent).
The closest dated WTI oil future was trading at US$66.27 (+1.5 per cent).
Cryptocurrencies were booking losses across the board. Bitcoin fell 4.8 per cent and Ethereum decreased by 0.8 per cent.
The US 10-year treasury rate increased slightly to 1.693 per cent.
Australian Markets:
The ASX200 was down again yesterday after setting another new 52-week high, falling 0.7 per cent. Nine of 11 sectors closed lower. This fall was led by Utilities, down 2.2 per cent, and Energy, down 2.0 per cent.
The only sectors to rise were Information Technology, up 0.8 per cent, and Telecommunication Services, which gained 0.2 per cent.
The biggest outperformer was goldminer, Resolute Mining, which rose 6.4 per cent. This mirrors the high gold commodity prices currently experienced internationally.
Aerial imagery provider, Nearmap, rose 4.5 per cent. This rise is a partial recovery after the share price dropped 19 per cent last week.
Multinational banking group, CBA (up 1.1 per cent), was the latest bank to announce rebounding cash profits ($2.4 billion for Q3) underpinned by bad debt provision write backs. This result represents a 24% improvement on the quarterly average during the six months to December.
The worst performer was energy company, Ausnet Services, down 7.7 per cent. The 2021 full year results were released yesterday, with performance affected by a "challenging and rapidly changing external environment". Revenue for the year was down 2.7 per cent and the dividend per share reduced from AU$0.102 to AU$0.095.
Another underperformer was online gambling company, Pointsbet Holdings, falling 6.3 per cent.
Online automotive retailer, Carsales.com, is in trading halt after announcing plans to raise AU$600 million to fund its intended acquisition of 49% of Interactive Trader, a US online caravan, truck, equipment, and bikes listings company. It will offer investors new shares at $17 each, to raise $600 million to fund the acquisition, with another $222 million to be funded by existing debt facilities.
Criticism of Australia's slow vaccination rollout continues. New South Wales and Victoria recorded no cases of community transmission yesterday, a positive development after earlier unexplained cases.
• 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>
Kerry Boielle on what the Taranaki-based bank needs to better compete with the big banks.