Jarden Brief: Instagram getting bruised in social media war with TikTok

Meta fell 7.5 per cent and Instagram is facing pressure from rival TikTok. Photo / Getty

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

International

US

All three major US indices were trading in the red at the time of writing, after inflation did not ease as much as expected in August.

The Consumer Price Index rose 8.3 per cent from a year earlier. Despite falling gas prices pulling inflation lower, the data revealed rapidly rising costs for rent, health care, restaurant meals and goods that ended up offsetting the lower fuel costs. The Federal Reserve is expected to make its interest rate decision next Wednesday.

A broad-based selloff captured equities with the S&P 500 down 2.9 per cent, the Nasdaq dropping 3.8 per cent and the Dow Jones Industrial Average trading 2.7 per cent lower at the time of writing.

The eleven sectors were also down, with communication services and technology both falling 3.9 per cent. Consumer discretionary (-3.7 per cent) also dragged the index down.

Eastman Chemical Company had the largest fall in share price at the time of writing, down 9.0 per cent after the company cut its third-quarter earnings outlook.

The company provided earnings per share (EPS) guidance of US$2.00 for the period and cited lower than expected demand as well as higher costs. Eastman Chemical had previously issued guidance for "solid growth" compared to last year's estimates of US$2.46.

Data storage company Western Digital fell 8.2 per cent.

Rounding out the bottom movers was Meta Platforms, down 7.5 per cent [it closed down 9.37 per cent]. Despite Chief Executive Mark Zuckerberg backing the social media giant's future on Instagram short-video Reels, the service is facing pressure from rival TikTok.

Instagram users are spending less than one-tenth of the 197.8 million hours competitor TikTok users spend each day on the platform, according to a report by the Wall Street Journal.

On the flip side, lithium producer Albemarle rose 7.1 per cent at the time of writing.

Next in line was Twitter, up 2.3 per cent. Twitter shareholders voted to approve Elon Musk's US$44.0 billion bid to buy the company in April.

Twitter has encouraged investors to accept the proposed buyout since then, despite Musk filing numerous requests to terminate the deal. The approval means that Musk and Twitter will proceed to an October trial.

Agricultural science company Corteva traded 1.1 per cent higher at the time of writing.

This follows the company announcing that its Board of Directors authorised a US$2 billion share repurchase plan.

Rest of the World

Asian markets were mixed overnight. The Shanghai Composite rose 0.1 per cent, the Nikkei increased 0.3 per cent and the Hang Seng fell 0.2 per cent.

European markets closed largely in the red. The FTSE, the DAX and the CAC fell 1.2 per cent, 1.6 per cent and 1.4 per cent respectively.

Commodities

WTI Crude Oil traded 1.6 per cent lower to US$86.35 per barrel.

Gold also underperformed, down 1.3 per cent to US$1,717.8 per ounce.

The cryptocurrency market also saw losses, with Bitcoin and Ethereum down 7.1 per cent and 5.9 per cent respectively. Electronic trading giant Citadel Securities and brokerages Fidelity Investments and Charles Schwab announced plans to launch a new cryptocurrency exchange, called EDX Markets.

At the time of writing the US 10-Year Treasury rate had risen seven basis points to 3.433 per cent, whilst the 30-Year rate increased one basis point to 3.518 per cent.

New Zealand

The NZX 50 was in the red yesterday, declining 0.4 per cent to 11,762.2 points.

Fast food restaurant company Restaurant Brands was the top performer of the index, improving 5.9 per cent. This movement does not appear to relate to any news.

Transport software company EROAD also performed well, lifting 5.2 per cent.

Rounding out the top movers was managed investment scheme Fonterra Shareholders' Fund. Building on Tuesday's performance, advancing 4.2 per cent. The fund will release its full year 2022 earnings results on 22 September.

Property company Argosy Property was the biggest underperformer of the index, reducing 3.0 per cent yesterday, now 16.3 per cent lower year to date.

A Substantial Product Holder Notice for BlackRock which now owns just over 5.0 per cent of Argosy Property's ordinary shares.

Outdoor, lifestyle and sports company KMD Brands also performed poorly, decreasing 2.9 per cent yesterday, down 32.5 per cent year to date. The company's 2022 full year earnings will be released on 20 September.

Closing out the bottom movers was retirement village and aged-care operator Ryman Healthcare, dropping 2.7 per cent, now down 27.4 per cent year to date.

Australia

The ASX 200 increased 0.7 per cent on Tuesday, closing at 7,009.7 points.

Real estate investment trusts led sector performance, up 1.7 per cent; followed by gains in consumer discretionary (+1.2 per cent) and energy (+1.0 per cent).

Conversely, healthcare and information technology fell 0.8 and 0.3 per cent, respectively.

Leading the market was excavation firm Chalice Mining, which rose 9.8 per cent, following no news.

Battery producer Novonix was up 7.5 per cent. Software company Brainchip increased 5.8 per cent.

On the other side of the market, administration solutions provider Link dropped by 20.1 per cent.

Software company Dye & Durham has been given the green light by the UK Financial Conduct Authority (FCA) to continue with its bid for Link.

However, this is contingent on Dye and Durham agreeing to cover a fine of up to £306 million (approximately A$519 million). Link noted that they are exploring all options, and this is not necessarily the FCA's final decision.

Hospital operator Ramsay Health Care fell 10.4 per cent. Yesterday, Ramsay confirmed that the consortium of investors, led by global investment firm KKR, had no intention of improving their most recent bid for the company, which had been rejected the previous month.

Lastly, online bookmaker Pointsbet decreased 2.6 per cent.

• For more information on the latest market moves, get in touch with Jarden.

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

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