Jarden Brief: Why US markets hit all-time highs overnight

Optimism surrounding vaccines has had a positive impact on the US market. Photo / Getty Images

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

New Zealand

The S&P NZ50 finished the day up 0.8 per cent yesterday after the director general for health announced that there were no new Covid-19 cases in the community, raising hopes that the most recent lockdown measures may not require an extension.

In response, the best performing sector on the day was Consumer Staples, which added 1.7 per cent, followed by Industrials, up 1.7 per cent. The worst performing sector on the day was Financials, down 0.5 per cent.

Parliament is urgently hearing legislation to increase business support in case the present lockdown extends past the initial three-day period. Under the Resurgence Support Payment plan, businesses can get access to $1500 plus $400 per employee if they show that they have experienced at least a 30 per cent fall in revenue over seven days. The government will decide if this payment will be made available. If this is the case, the initial 72-hour alert level rise will be included in the measurement period.

Diversified asset holder Infratil (+0.5 per cent) released details from its investor day, providing updates on its portfolio composition and strategy going forward. Company earnings before interest taxation, amortisation and fair value adjustment are forecast to fall between $440 and $470 million.

Aged care operator Ryman Healthcare, which gained 4.2 per cent, was the best performer on the day. Retailer generator Mercury Energy recovered 3.2 per cent after large selloffs during the days prior. Airport operator Auckland International Airport (+3.1 per cent) rounded out the top performers on the day after announcing renewals of their airfields.

On the other hand, gentailer Contact Energy dipped 2.1 per cent after coming out of halt; while fast food chain franchisor and operator Restaurant Brands (-1.8 percent) and retail bank operator Heartland Group (-1.5 per cent) were the worst performers on the day.
Real Estate Investment Trust Investore Property Limited (flat on the day) and Asset Plus Limited (+2.9 per cent) declared third quarter dividends. Investore's dividend amounts to 1.9 cents per share, payable on the third of March 2021.

International
US Markets:

US markets climbed to all-time highs last night over optimism of a vaccine-led economic recovery, before falling back to flat levels. The S&P 500 was unchanged, while the NASDAQ dropped 0.2 per cent. The DJIA was the best performing major index, up 0.3 per cent.

The seven-day average of new Covid cases in the US has fallen 23% from last week to circa. 85,200 a week. While deaths of roughly 3,000 a week have remained constant, some light can be seen with Moderna announcing that it expects to deliver 100 million doses of its vaccine to the US government by the end of March 2021.

The best performing sector of the day was the Energy sector, which rose 2.3 per cent on top of yesterday's gains. Meanwhile, Financials (+1.7 per cent) and Materials (+0.6 per cent) rounded out the top performing sectors. On the other hand, the Real Estate (-1.4 per cent) and Utilities (-1.2 per cent) sectors lagged the market.

NASDAQ performance was buoyed by multi-listed Chinese tech stocks, while cruise operators Carnival Corporation (+8.4 per cent) and Royal Caribbean Cruises (+7.9 per cent) led S&P 500 back to neutral territory – with another shot of vaccine optimism fuelling positive market sentiment.

Asian markets:

Asian markets were muted with all Chinese markets closed due to Chinese New Year celebrations. The Nikkei continued to gain 1.3 per cent to 30,468, while the KOSPI index grew 0.5 per cent.

New York-listed Chinese tech stocks climbed strongly, with agriculture tech platform Pinduoduo up 4.5 per cent, online travel bookings platform Trip.com rallying 4.4 per cent, online retailer JD.com climbing 4.4 per cent and search engine giant Baidu rising 2.7 per cent.

Commodities:

Gold fell 1.5 per cent overnight to US$1,795.60 per ounce while oil advanced another 0.8 per cent to US$59.92. Meanwhile, Bitcoin breached $50,000 briefly for the first time, before retreating to US$48,442.90.

Australia

The S&P ASX200 finished the day up 0.7 per cent.

The best performing sector on the day was Energy, which rallied 2.1 per cent. The next best performing sector was Industrials, which climbed 2.0 per cent. Meanwhile, the worst performing sector on the day was Consumer Discretionary, which lost 0.7 per cent, followed by Utilities, down 0.5 per cent.

Buy now pay later company Zip Co Ltd claimed the top spot on the day again, rising 10.0 per cent. Data labelling and machine learning company Appen (+7.7 per cent) and recycling company Sims Ltd (+7.4 per cent) rounded out the top three performers.
GWA Group (-8.1 per cent) was the worst performing company on the day, followed by online retailer Kogan.com (-5.2 per cent).

Vehicle accessory retailer ARB (-3.3 per cent) released a positive but perhaps underwhelming first half result. With Covid-19 keeping people from travelling, more people are heading on four-wheel drive holidays nearer to home. First-half revenue of AU$285 million is up 22 per cent from the same period last year while net profit of AU$54.0 million rose 113 per cent. Accordingly, the company has announced a 29 cent per share interim dividend, compared to 18.5 cents per share for the same period last year. Chairman Roger Brown has cautioned against expecting similar outperformance going forward given a confluence of pent-up demand for road trips; overseas travel restrictions; federal stimulus and rising consumer confidence all underpinning first-half performance.

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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