Jarden Brief: Major US indices in the green as Fed hikes interest rates

All major US indices were in the green today. Photo / AP

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

New Zealand

The NZX 50 closed at 11,874.11 points yesterday, an improvement of 0.6 per cent.

SkyCity Entertainment Group led the outperformers with a 3.2 per cent gain. Electricity gentailer Mercury NZ followed with a 3.1 per cent rise. Lastly, Fonterra Shareholders Fund climbed 3.0 per cent despite a weakening Whole Milk Powder price after Wednesday morning's Global Dairy Trade (GDT) auction.

Donation management company Pushpay Holdings lost ground yesterday (-2.7 per cent) following a strong day of trading on Tuesday. Travel management technology company Serko declined 2.6 per cent.

The Government announced an easing of border restrictions earlier than previously indicated, opening up to Australian tourists in time for Australia's school holidays. Vaccinated visitors will be able to travel across the ditch without isolating from April 13, and holidaymakers from visa-waiver countries (including key markets such as the US, UK and Germany) will follow from May 2.

Tourism New Zealand launched a new marketing campaign in Australia in an effort to stimulate demand prior to April's reopening. Historically, Australians have made up a sizable portion of our visitor market, previously comprising 40 per cent of international arrivals, and 71 per cent of the international tourists who fly here to ski.

Millennium & Copthorne Hotels New Zealand welcomed the expedited loosening of border settings, noting that reopening to international visitors "will definitely make a difference to our trading performance particularly in the second half of this year." The accommodation provider closed in the green yesterday (+0.9 per cent).

Air New Zealand rose 2.2 per cent yesterday, while Auckland International Airport slid 1.1 per cent on the day. Statistics New Zealand Balance of Payments data for the December 2021 quarter has revealed a $6.5 billion seasonally adjusted deficit, $1.8b wider than the previous quarter. This was primarily driven by a widening of the services and goods deficits of $1.1b and $417 million, respectively.

Increased dairy, mechanical machinery and equipment, and aluminium exports led to a $509m improvement in goods exports. This was outpaced by a $926m rise in goods imports as transport equipment, crude oil and fertiliser imports increased.

International
US

All major US indices were in the green today with the Nasdaq, S&P 500, and Dow Jones Industrial Average having increased 1.9, 1.0, and 0.7 per cent, respectively.

The financial sector performed the best, rising 2.1 per cent. Notable gains were also seen by consumer discretionary and communication services, up 1.8 and 1.5 per cent, respectively. Utilities, consumer staples and energy were down 0.7, 0.2, and 0.1 per cent, respectively.

Share prices in EPAM Systems continued to trade with volatility as seen in the last few weeks; with a large proportion of the software developer's operations being based in Ukraine and Russia. EPAM stock has performed well so far today, increasing 17.6 per cent.

Moderna rose 9.7 per cent, the biotechnology company containing its strong performance seen earlier in the week. This could be linked to news of HIV vaccine clinical trials beginning.

Property developer Las Vegas Sands was up 8.2 per cent on no news. This may be seen as a slight correction, previously having seen the largest share price decline of the S&P 500 earlier in the week.

At the time of writing, NortonLifeLock, a cyber security company, experienced the largest decline of the day in the market, falling 13.2 per cent. Recent news of an anti-trust investigation into the potential acquisition of the internet security company Avast might be contributing to the fall.

Specialising in hydrogen and nitrogen products, CF Industries Holdings lost 7.0 per cent. This follows a recently reported upgrade from the Goldman Sachs Group, which increased their target price from US$91 to US$131.

Lockheed Martin Corporation, the security and aerospace company, decreased 6.0 per cent. The US government recently announced a small budget cut to the acquisition of F-35 jet fighters in 2023; investors are likely pricing this information into the share price.

This morning, US Federal Reserve Chairman Jerome Powell lifted the interest rate from 0.25 to 0.50 per cent, the first hike since 2018.

Rest of the World

The major Asian indices were in the green at the time of writing. The Shanghai Composite and the Nikkei gained 3.5 and 1.6 per cent, respectively. Having recently fallen to prices not seen since 2001, the Hang Seng Index (HSI) jumped 9.1 per cent over yesterday's trading, its best day since 2008.

Major contributors to the HSI move were tech giants Alibaba (+27.3 per cent), Tencent (+23.2 per cent), and NetEase (+23.4 per cent).

European indices were in the green across the board with the DAX, CAC, and the FTSE up 3.8, 3.7 and 1.8 per cent, respectively.

Commodities

Gold and silver both decreased, by 1.1 and 1.5 per cent, respectively. Natural gas rose by 2.7 per cent while oil presented a relatively stable performance, up 0.3 per cent to US$96.7 per barrel.

The cryptocurrency market was up 2.3 per cent overall with Ethereum and Bitcoin having gained 3.0 and 1.8 per cent, respectively.

The US 10-year treasury rate rose two basis points to 2.176 per cent.

Australia

The ASX 200 was back up on Wednesday, rising 1.1 per cent to 7175.20.

All sectors closed higher, with information technology leading the way, gaining 3.6 per cent. This was pushed by financial technology company Square, which climbed 7.0 per cent to A$142.92.

Other overperforming sectors were consumer staples (+2.0 per cent), consumer discretionary (+2.0 per cent) and telecommunications services (+1.9 per cent).

Yesterday's top single stock mover was location-based services provider Life360 increasing 7.4 per cent.

Corporate Travel Management (+5.3 per cent) and machine intelligence company Appen (+4.8 per cent) were in second and third place. News that New Zealand will be reopening its borders to Australian tourists likely had an effect on Corporate Travel's movement. Qantas Airways, Webjet and Flight Centre also benefited from the news, closing at A$5.05 (+2.2 per cent), A$5.67 (+3.3 per cent) and A$19.11 (+1.9 per cent) respectively.

The greatest underperformer on Wednesday was Super Retail Group, losing 3.2 per cent, followed by healthcare company Nanosonics closing 3.1 per cent lower and media company Seven Group Holdings falling 2.4 per cent.

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

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