Jarden Brief: Crypto hedge fund defaults on US$670 million loan

Cryptocurrencies were down again today. Photo / AP / Kin Cheung.

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

US

All major US indices were in the red at the time of writing. The S&P 500 was down 0.3 per cent, the Nasdaq dropped 0.6 per cent and the Dow Jones Industrial Average fell 0.2 per cent.

Sectors were mixed with four of 11 in the green. Energy rose 2.7 per cent, utilities was up 0.6 per cent and health increased 0.4 per cent. Conversely, communication services was down 1.3 per cent, consumer discretionary decreased 1.2 per cent and materials declined 0.9 per cent.

The top performers were all energy stocks, in line with sector gains. International fuel manufacturer Valero Energy was up 7.4 per cent. Natural gas liquids company Devon Energy rose 7 per cent and oil and gas exploration and production company Hess Corporation increased 4.8 per cent.

Tech and gaming companies have had a tough morning so far, with video game publisher Electronic Arts the biggest underperformer, dropping 5 per cent. E-commerce company Etsy lost 4.2 per cent after a downgrade in rating by an analyst, citing the negative impact rising inflationary pressures could have on the business. Rounding out the bottom movers was another video game company, Take-Two Interactive Software, decreasing 3.7 per cent.

BioNTech rose 7.1 per cent after the drug maker and partner to Pfizer said the updated version of their Covid-19 booster vaccine generated an improved immune response against the Omicron variant.

Rest of the World

Asian markets were in the green overnight. The Shanghai Composite increased 0.9 per cent, the Nikkei rose 1.4 per cent, and the Hang Seng was up 2.4 per cent.

European markets were mixed. The FTSE rose 0.7 per cent, the DAX was up 0.5 per cent while the CAC declined 0.4 per cent.

Commodities

Gold traded 0.4 per cent lower to US$1,823.9 per ounce, while silver inclined 0.1 per cent to US$21.1 per ounce.

Oil also performed well, rising 2 per cent to US$109.82 per barrel.

The cryptocurrency market was in the red, with Bitcoin having decreased 2.6 per cent and Ethereum down 3.2 per cent, at the time of writing. Additionally, prominent crypto hedge fund Three Arrows Capital has defaulted on a loan worth more than US$670 million. This comes after weeks of instability in the crypto market, which has wiped hundreds of billions of dollars in value.

The US 10-Year Treasury rate rose seven basis points to 3.198 per cent alongside a five basis point gain in the 30-year rate, to 3.307 per cent.

New Zealand

The New Zealand share market started the week strong. The NZX 50 closed 1.7 per cent higher during yesterday's trading session, following a 1.2 per cent increase on Thursday ahead of Friday's market closure for Matariki.

There were 116 gainers and 27 decliners on the New Zealand main board, but trading volume was light with only 28.3 million shares trading hands.

Small cap stocks led the way, with healthcare company Pacific Edge up 5.9 per cent and Tourism Holdings gaining 4.3 per cent yesterday.

Air New Zealand rose 4.6 per cent as it gets ready for its busiest July in two years, relaunching 14 international routes in 16 days. With these routes back in action, the airline will be operating at 60 per cent of its international capacity. The airline has hired or rehired more than 2000 staff across the business.

Of the top 50 companies listed on the New Zealand stock exchange, only five closed in the red. Milk processor and distributor Synlait Milk and infrastructure company Vector led the underperformers, both down 1.9 per cent. Rounding out the bottom movers was payment services company Pushpay Holdings, falling 0.8 per cent.

The ANZ business outlook and consumer confidence surveys are expected this coming week.

Australia

The ASX 200 was in the green yesterday, up 1.9 per cent to 6,706 points. This 127 point increase brings the index to (+4.2 per cent) across the last five days.

10 of the 11 sectors closed higher at the end of yesterday's trading session. The best performing sectors were financials and energy (+2.6 per cent each), followed by information technology (+2.4 per cent). Australian real estate was the only laggard of the sectors, regressing 0.8 per cent.

Immuno-oncology biotechnology company Imugene was the top performer of the index, advancing 45.5 per cent. This follows positive results from the company's phase two trials for its HER-Vaxx oncolytic, a virus that breaks down gastric cancer cells.

Rounding out the top movers was wagering services operator Pointsbet Holdings and metals exploration & development company Liontown Resources, inclining 12.5 per cent and 11.3 per cent, respectively.

Gold mining company Evolution Mining was the index's largest underperformer, dropping 21.9 per cent yesterday. The company lowered its production guidance for the 2023 financial year.

Closing out yesterday's bottom movers were mining companies Northern Star Resources and Ramelius Resources, plummeting 12.1 per cent and 5.9 per cent, respectively. These stocks may have been affected by Evolution Mining's movements, with updates anticipated on the companies' neighbouring mines in Western Australia.

Disclosure: Jarden is advising Tourism Holdings Limited on an agreement to merge with Apollo Tourism and Leisure Limited.

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Disclaimer: The Jarden Brief is provided for general information purposes only. It reflects views and research available 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. The Jarden 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 financial advice disclosure statement is available free of charge at https://www.jarden.co.nz/our-services/wealth-management/financial-advice-provider-disclosure-statement/ Full disclaimer available at: https://www.jarden.co.nz/wealth-sales-and-research-disclaimer