Jarden Brief: Nasdaq plunges 5.4 per cent

US shares have plunged this morning. Photo / File

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

International
US

On Wednesday in the US, stocks rallied following news that US Federal Reserve chairman Jerome Powell was not considering a future 75 basis point rise in the interest rate.

Today, stocks saw the largest decreases of the year at one point, erasing their gains from yesterday. At the time of writing, the Nasdaq had fallen 5.4 per cent while the S&P 500 and the Dow Jones Industrial Average dropped 4 per cent and 3.6 per cent, respectively.

All sectors are in the red, led by consumer discretionary (-6.3 per cent), technology (-5.4 per cent), and the communication services sector (-4.5 per cent).

Epam Systems, a digital services provider, rose 9.3 per cent. The company released an earnings report prior to market open revealing earnings of US$2.49 per share, ahead of a consensus forecast of US$1.79 per share.

Also performing positively was chemical manufacturer Albemarle (+7.9 per cent) and health solutions company Organon (+4.8 per cent). Recently released earnings reports from both firms seem to have been well received by investors.

Global marketplaces Etsy and eBay fell 18 and 11.1 per cent, respectively. These drops have set new 52-week lows for their share prices. Both companies released results after market close yesterday with cuts to guidance, which may have disappointed investors.

Rounding out the underperformers was Cognizant Technology Solutions (-13.4 per cent), which specialises in business products and services.

Rest of the world

Asian markets were mixed overnight. The Shanghai Composite increased 0.7 per cent, while the Hang Seng and Nikkei fell 0.4 and 0.1 per cent, respectively.

European indices were also varied. The FTSE rose 0.1 per cent, while the DAX and CAC dropped 0.5 and 0.4 per cent, respectively.

The Bank of England's Monetary Policy Committee raised the interest rate by 25 basis points, taking the rate to 1 per cent, the highest level in 13 years. The Bank of England is expecting inflation to hit approximately 10 per cent this year due to the conflict in Ukraine and lockdowns in China.

Commodities

The price of WTI Crude Oil increased 0.1 per cent to US$107.95 per barrel. Natural gas also rose 3.4 per cent to US$8.7. Oil and gas producers Shell and British Petroleum (BP) have reported respective record quarterly profits, the highest in more than a decade.

Gold prices were up 0.4 per cent to US$1875.8 per ounce.

Bitcoin and Ethereum saw significant losses, each down 7.7 and 7.3 per cent. Cryptocurrencies are said to be correlated with market performance so this may be connected to some investors possibly liquidating some of their assets due to market uncertainty.

The US 10-Year Treasury yield rose 19 basis points to 3.104 per cent.

New Zealand

The NZX 50 saw a moderate recovery yesterday with a gain of 0.6 per cent to 11,747.57 points.

The Warehouse Group led the market with a 4.9 per cent improvement. Fleet management technology company EROAD rose 3.6 per cent. Fast food firm Restaurant Brands New Zealand capped off the top three gainers with a 3.3 per cent increase.

Air New Zealand fell 6.3 per cent against the run of play. The airline concluded its equity raise, yesterday announcing a completion of the shortfall bookbuild process for the 274 million shares not taken up during the rights offer. Air New Zealand said it will use the $1.2 billion generated from the equity raise to repay outstanding Crown debt, improve liquidity, and bolster its balance sheet as the airline looks to position itself for post-pandemic recovery.

ANZ Banking Group (-2.7 per cent) and aged care company Arvida Group (-1.9 per cent) also closed in the red.

At a special meeting held yesterday, Radius Residential Care's (-4.8 per cent) shareholders approved a $46.7 million purchase of four aged care facilities the company currently leases.

Australia

The ASX 200 rose a slim 0.8 per cent yesterday to 7364.7 points.

All but one sector closed higher with information technology (+2.5 per cent) and energy (+2.0 per cent) leading the way. Financials remained unchanged.

Leading the index upwards was Liontown resources, gaining 7.7 per cent.

Lithium and tantalite mining company Pilbara Minerals increased 7.6 per cent and cement manufacturer Adbri was up 7.1 per cent.

Conversely, asset management company Janus Henderson led the decliners, down 13 per cent. The group released its first quarter 2022 results on Wednesday after market close, with adjusted operating income of US$178.8 million and a 3 per cent quarterly dividend increase to US$0.39.

Life360 and Nanosonics both fell 1.9 per cent.

National Australia Bank (NAB) released half year results yesterday for its financial year 2022, with cash earnings of A$3,480 million, up 4.1 per cent from the first half of 2021 and aligning with market expectations. Additionally, an interim dividend of A$0.73 was announced, beating many analysts' expectations, and up from the final dividend in 2021 of A$0.67.

Woolworths has ended its corporate superannuation services contract with AMP. AMP has expressed they expect a A$4 billion drop in their funds under management. They did however rebound after an initial drop following the news, to increase 1.7 per cent, closing at A$1.21 last night.

Commonwealth Bank followed ANZ, Westpac, and NAB in lifting savings rates following Tuesday's rate rise from the Reserve Bank of Australia. This follows Prime Minister Scott Morrison calling for banks to pass on the rate rise to savers who have received relatively small returns during the period of low interest rates in recent years.

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