Jarden Brief: Domino’s Aussie outfit cheesed off at high prices, labour costs

A cavalcade of hassles in the global economy led to a terrible Australian stock market performance for Domino's. Photo / Supplied

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

International

US

US markets were mixed at the time of writing, responding to the US Federal Reserve announcing a 75 basis-point hike to its cash rate.

At time of writing the S&P 500 was up 0.1 per cent, the Nasdaq Composite was 0.2 per cent lower and the Dow Jones Industrial Average was down 0.4 per cent.

The 75 basis-point hike is the fourth consecutive three-quarter interest rate increase to take rates to the highest level since 2008. It continues the strongest pace of monetary policy tightening since the early 1980s, the last time inflation was as high in the US.

Media company Paramount Global declined 11.0 per cent after releasing its quarterly results, citing a drop in advertising revenue contributing to a 5 per cent decline in TV media segment revenue compared to the previous quarter.

Airbnb had fallen 10.9 per cent at the time of writing, despite the "biggest and most profitable quarter ever", according to the company.

While earnings per share appear to have beaten expectations, revenue being in line with estimates, future guidance may have disappointed to the downside.

American Airlines pilots' union board of directors rejected a tentative agreement for a new contract.

The Allied Pilots Association, which represents roughly 15,000 American Airlines pilots, said its board voted against the tentative deal.

The proposal specifies pilot salary increases for the next three years. American Airlines share price had declined 1.3 per cent at the time of writing.

Rest of the World

European stocks closed lower with investors focused on the Federal Reserve announcement. The European Stoxx 600 Index was down 0.3 per cent and the FTSE 100 declined 0.6 per cent.

In Asia, Hong Kong's Hang Seng Index was halted after gaining 2.4 per cent following the release of a Tropical Cyclone Warning Signal Number 8. This cyclone alert cancelled the afternoon of trading. The Nikkei declined a slim 0.1 per cent and the Shanghai Composite rose 1.2 per cent.

Commodities

Brent Oil continues to rise, currently trading 1.3 per cent higher at US$95.90 a barrel, while gold rose 0.1 per cent to US$1,649.50 per ounce.

Further appreciation has been seen in global currencies against the USD – with the NZD up 0.5 per cent against the US dollar, the Euro appreciating 0.3 per cent and the AUD 0.1 per cent higher.

Bitcoin made a slight loss today, down 0.1 per cent to US$20,470.20.

New Zealand

The NZX 50 closed 0.3 per cent lower in the wake of a weak night for markets in the US.

Air New Zealand was the top performer, up 3.8 per cent. Air New Zealand announced the issuance of 14.79 million performance rights to the CEO and selected executives under the Long Term Incentive Plan, which will vest in 2025 if the share price outperforms a comparison index over a three-year period.

In 2020, 2021 and 2022 targets were not met, and no shares were awarded as part of the Plan.

Sky Network Television rose 2.7 per cent yesterday. Earnings guidance was unchanged at the Sky AGM, with a small rise to dividend guidance from $17-$23m to $18-$24m.

A2 Milk recently announced it is taking legal action against Australian competitor Care A2 Plus, alleging it has engaged in misleading and deceptive conduct by infringing its trademarks and is seeking an injunction to prevent the company from selling product in Australia.

Care A2 is one of a small number of Australian companies to obtain a permit to export dairy products to the US. A2 Milk rose 0.5 per cent yesterday, partially recovering from the previous day's decline.

In macroeconomic news, New Zealand's labour market is still tight as unemployment remains close to record lows while wages continue to rise, adding to inflationary pressure in the economy.

Statistics NZ data outlined that while employment remained unchanged at 3.3 per cent in the quarter ended September, the private sector labour cost index rose 3.8 per cent in the September year, with average hourly earnings up 7.4 per cent.

Australia

The ASX 200 rose 0.1 per cent yesterday, propped up by basic materials (up 1.2 per cent) and energy companies (up 1.1 per cent).

Rising oil prices sent Woodside Energy and Santos higher, up 1.2 and 0.8 per cent, respectively.

A signed accord between Woodside Energy and the Japan Bank for International Cooperation on energy security and decarbonisation has increased expectations that Japanese buyers may sign up to support Woodside's A$16.5 billion Scarborough LNG project, AFR is reporting.

Coal miner Santos, up 0.8 per cent, benefitted from rising coal prices while technology stocks fell following declines from the sector in the US. WiseTech Global lost 2.5 per cent and Xero declined 3.4 per cent.

Rio Tinto rose 2.4 per cent. It reconfirmed that its proposal of C$43 per Turquoise Hill share to acquire the 49 per cent of the Canadian miner they do not already own, is their best and final offer.

Pizza maker Domino's was the worst performer of the ASX 200, losing 5.3 per cent.

At the AGM yesterday the company released a trading update and provided guidance. It flagged that earnings will be "materially lower" in the first half, caused in part by inflationary pressure on cheese, higher labour costs and rising energy prices in Europe.

Coming up today

Locally Precinct Properties is hosting its AGM. In Australia, the Trade Balance is being released and there is a quarterly update from Woolworths, while Boral, AUB Group and Downer EDI all have AGM's. In the US the Trade Balance and Initial Jobless Claims data is being released.

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All market pricing and announcements are sourced from Refinitiv, NZX and ASX.