Jarden Brief: Brisbane lockdown hits travel stocks

The outbreak has come as a blow to the hopeful tourism industry. Photo / File

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

New Zealand:

The S&P NZ50 finished yesterday up 0.2 per cent, buoyed by Utilities and Industrials, which were the top-performing sectors, increasing 0.6 per cent respectively.

Online travel solutions provider Serko Ltd continued momentum, claiming the indices top spot by climbing 3.6 per cent. Closely behind was generator-retailer Meridian Energy Ltd, up 3.4 per cent.

Meridian had an impressive run leading into the new year as the election of Joe Biden caused a flow of capital into clean energy investments and the stock hit a high of NZ$9.94 in January. These gains were quickly reversed following a new pricing agreement with exiting customer Rio Tinto (which operate the Tiwai Point aluminium smelter) and other unfavourable generation conditions in February and March. Meridian now trade at NZ$5.28.

Dairy products distributer Synlait Milk Ltd had a tough day after the reporting of its half year results, falling 5.9 per cent, now trading at NZ$3.34. Investors reacted sharply to the underwhelming result with both net profit (NZ$6.4mn) and operating earnings (NZ$47.7) coming in below market expectations.

Joining Synlait, was electricity and gas distributer Vector Group Ltd, which slumped 4.1 per cent on its ex-dividend day.

Among news over the weekend was the release of ASB's regional economic scoreboard, which measures and compares prosperity between the main New Zealand regions by quarterly change in economic growth. Highlights include the North Island outperforming the South as COVID-19 effects continue to hinder South Island tourism. The Northland region claimed top spot on the back of strong forestry exports to China while other rural regions also prospered. The Bay of Plenty and Waikato came in second and third following their own primary industry boom.

International Markets:
US:

At the time of writing the S&P500 was up 0.1 per cent, the Dow Jones Industrial Average increased 0.3 per cent, and NASDAQ was down 0.1 per cent.

The top performing sectors were Communication Services and Utilities, increasing 1.2 and 1.1 per cent, respectively. On the flipside, with the worst performance were Energy and Financials, down 1.2 and 0.9 per cent, respectively.

At the time of writing, the top performing stocks were Discovery rising 3.9 per cent, energy delivery company CenterPoint Energy, up 3.6 per cent, and heating, air conditioning, and refrigeration provider Carrier Global, increasing 3.4 per cent. The two latter increases happened after their target prices were raised from US$24 to US$26 (CenterPoint) and from US$41 to US$53 (Carrier Global), respectively. The worst performers were Penn National Gaming falling 7 per cent, luxury fashion holding Tapestry Inc., decreasing 5.1 per cent, and Enphase Energy, down 5 per cent.

Volkswagen accidentally leaked the new name for its US operations, Voltswagen of America. Meant for publication at the end of April, the announcement has been taken down. The new name is showcasing the company's efforts in the electric vehicle space and the emblem is supposed to be placed next to the usual "VW" on all EV models.

Rest of the World Markets:

The Shanghai Composite increased slightly by 0.5 per cent, the Nikkei was up 0.7 per cent, and the Hangseng stayed flat at 28338 points.

The giant container ship MV Ever Given has been blocking the Suez Canal in Egypt for a week now. It is estimated to cost about US$400 million per hour, since there are over 350 ships waiting to continue their journeys. Yesterday, the Ever Given was successfully re-floated and made it to Great Bitter Lake where it will be inspected for any damage. It will still take a while for the backlog of ships to move through the canal, where usually about 50 ships come through per day. There is a lot of concern regarding the supply chain of manufacturers, retailers, and oil companies, who are all affected by this traffic jam.

Commodities:

Most of the metals were down, with Gold decreasing 1.2 per cent to US$1714.10. Oil was slightly up 0.2 per cent at US$61.17, while Brent was flat at US$64.59.

Crypto currencies were all in the green, with Bitcoin rising 4.6 per cent and Ethereum rallying 7.8 per cent.

The US 10-year treasury yield increased to 1.69 per cent. Investors are still concerned about inflationary pressures and curious about Joe Biden's infrastructure plan, which is expected to be released this Wednesday and could cost more than US$3 trillion.

Australian Markets:

The ASX200 finished yesterday's trading down 0.4 per cent. The sectors which felt the decline the most were Information Technology, down 2.8 per cent, and Consumer Discretionary, which fell 1.4 per cent.

Software company Megaport was the worst performer of the day, down 6.0 per cent. Netwealth Group, a financial services technology company, followed closely behind with a 5.2 per cent decline.

The only two sectors to rise were Materials and Industrials, up 1.3 and 0.3 per cent, respectively. Iluka Resources was the standout of the day, up 7.0 per cent. The second-best performer of the day was Sims which rose 3.9 per cent. Both companies operate in the Minerals sector.

The ASX decline came on the heels of an announcement that Brisbane would begin a snap 3-day lockdown. Community transmission of the UK Covid-19 strain sparked these restrictions. Western Australia, Victoria and South Australia closed their borders to Queenslanders. These heightened restrictions are a knock to the Australian Covid-19 recovery and investor confidence.

Many travel-related stocks declined after the news with Flight Centre Travel Group down 3.0 per cent, Webjet down 2.8 per cent and Qantas down 0.8 per cent. This lockdown falling directly before Easter has reduced the hopes many businesses would have had of a booming holiday weekend.

Looking ahead, all eyes are on Brisbane's Covid-19 case numbers and the potential extension of restrictions.

• 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-disclaimer