"I think that it's had an impact on parts of the New Zealand market - particularly some of the growth-related stocks like Fisher and Paykel Healthcare and a2 Milk.
"Because their cash flows are further in the future, they are discounted at a higher rate when interest rates go up," he said.
There were "idiosyncratic" reasons for weakness in those two stocks, such as the pandemic, Carran said.
"The others to have been impacted are the interest-rate-sensitive stocks - the high yielders that did really well when interest rates were falling and were very low.
"Now that they are going the other way, they have given back a bit of the gain that they made back in those early days when interest rates were a lot more subdued.
"Looking forward, it really depends on how fast interest rates keep going up from here.
"My view is that we are probably past the fastest rises in interest rates. We may potentially start to see the rises in the longer end of the curve start to slow down a little bit more."
Priced in
Carran said interest rate rises have already been priced in.
"That's understandable because inflation is at multi-decade highs and the market is already factoring that in."
Interest rates could overshoot and potentially become more subdued throughout 2022, and Carran says the damage has probably already been done to local and world markets.
Jarden estimates just 20 per cent of the local market is directly exposed to high interest rates.
"There is a small proportion of the market that is directly affected by interest rates - that's probably your retail stocks. As people's mortgage payments go up, they have less discretionary spending."
Big property, like shopping malls, may also be affected.
Stocks like the retirement village operators - who do well when house prices are going up but who do not do well when prices are on the other side - may feel the pinch.
Likewise, some of Fletcher Building's housing projects may become less economic if house prices continue to fall.
More resilient stocks are likely to be the power generators, which tend to have stable cash flow.
Some of the larger industrial property companies might do a bit better.
"It is a volatile time at the moment, with lots of events happening globally, with the Ukraine war, high inflation globally and central banks starting to tighten."
"It could be a volatile period ahead but, fundamentally, I think we are still recovering from the pandemic.
"There is still the capacity for earnings to expand.
"From the information that we have in terms of the warning signs, the indicators of recession or expansion, it does not appear that we are heading for a major bear market of any sort, but things can come out of left field obviously.
While the share market is about 12 per cent down from last year's record high, the 12-month forward-weighted price earnings ratio for the New Zealand market is currently 27.3 times - still 12 per cent above the five-year average, according to Forsyth Barr.
Sad movies
Investors will have to wait until next month before they get any clues as to how New Zealand's corporate earnings are tracking, so they will be looking to the more regular earnings updates out of the US for direction.
If Netflix's latest confession is anything to go by, then investors could be in for a rough ride.
The streaming service and production company said it lost 200,000 subscribers in the first quarter of 2022 - when it had previously expected to add 2.5 million.
The revelation prompted a 35 per cent slide in Netflix's share price.
"The biggest stories over the next couple of weeks will be the US reporting season and Netflix was maybe a shot across the bow," Mark Lister, head of private wealth research at Craig's Investment Partners, said.
He said the market will be attuned to whether analysts' earnings forecasts have been too high.
If US consumers start to feel the effects of higher mortgage rates, then lower spending will be a worry.
"If they are starting to feel a slowdown then we will too.
"There are risks that analysts are perhaps too optimistic and that they are not factoring in all those headwinds," Lister said.
"Inflation and interest rates is still the biggest game in town, I think."
Peak milk
Industry concerns on capital structure changes highlight its importance post peak milk, Jarden said in a research note.
Since its formation, Fonterra has been able to grow its milk supply at the same time as it has ceded market share to faster growing independent milk processors – this has been enabled by strong underlying growth in NZ milk supply.
Milk supply growth has started to ease over recent years and there is the prospect that milk supply will flatten, or possibly fall, over this decade.
Fonterra has seen overwhelming farmer shareholder support for proposed changes to capital structure that enable greater flexibility in "sharing up", Jarden said.
This is despite the proposed changes coming at the expense of the value of farmer investment in Fonterra with the Share price down since the proposed changes were announced.
"Fonterra has positioned the changes as important for its ability to successfully compete for a finite New Zealand milk pool with ongoing loss of market share to Independents putting it at risk of stranded capital in this new environment for milk supply," Jarden said.
