Jarden Brief: Nasdaq slides 4pc ahead of tech earnings

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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 2.81 per cent, the Nadaq down 3.95 per cent and the Dow Jones was down 2.38 per cent.

Energy was the only sector to increase overnight rising 1.7 per cent. The worst performers were consumer discretionary (-4.4 per cent), technology (-2.9 per cent) and communication services (-2.8 per cent).

Paint manufacturer and distributer Sherwin-Williams Co was the best performer at the time of writing, up 8.6 per cent. This followed the release of its first quarter profits that beat market expectations. Sherwin-Williams also commented that it believes they are past the worst of its recent supply chain challenges caused by Covid-19 and the conflict in Ukraine.

Home appliance manufacturer Whirlpool was next in the green with a 6.2 per cent increase. This followed reporting of profits beyond expectations, but a reduction to its 2022 forecast. Similarly, Waste Management Inc is also up 5.8 per cent on the back of surpassing profit expectations for the first quarter this year.

Tesla Inc was down 11.2 per cent at the time of writing, making it the worst performer overnight. This followed the Twitter board approving Elon Musks US$44 billion acquisition of Twitter.

Multinational conglomerate General Electric Co had the next biggest decrease, falling 11.0 per cent. Although the company hit estimates in its quarterly report, it warned of the future challenges from inflation and supply chain issues.

Rounding out the bottom three performers was Universal Health Services Inc with a 10.2 per cent drop. This followed first-quarter profits that were below expectations.

Following the underperformance of the US markets overnight, the Chicago Boards Options Exchange Volatility Index (the VIX) jumped up 16.2 per cent. The index is known as a popular measure of the US stock market's expectation of volatility.

It is a busy week for reporting in the US with big names such as Apple, Alphabet, Microsoft, Meta Platforms, Twitter and Amazon all posting their first-quarter earnings, which could be pivotal for overall sector and index movements.

Rest of the World

Asian markets were mixed with the Shanghai Composite down 1.4 per cent, while the Nikkei and Hang Seng were up 0.4 per cent and 0.3 per cent respectively.

Similarly, European markets were varied. The FTSE was up 0.1 per cent, while the DAX and the CAC were down 1.2 and 0.5 per cent respectively.

Commodities

The US 10-year Treasury rate was seven basis points down, bringing the rate to 2.76 per cent.

WTI Crude Oil and natural gas both climbed moderately overnight, up 3.6 and 4.2 per cent respectively.

Gold remained flat with a small increase of 0.3 per cent.

The Cryptocurrency market was down 2.6 per cent at the time of the writing. This is mainly driven by Bitcoin and Ethereum's decreases of 2.3 and 2.1 per cent respectively.

New Zealand

The NZX 50 closed in the red yesterday, falling 0.8 per cent to 11,813.2 points.

The index's top performer was payment service provider Pushpay Holdings, advancing 24.3 per cent. This increase is the company's biggest intraday percentage gain since March 2020. This followed Pushpay announcing they

have received unsolicited, non-binding and conditional expressions of interest from third parties to acquire the company. The company also stated there is no certainty that these approaches will result in any transaction.

Film Technology company Vista Group International improved 1.7 per cent. There is a possibility the cinema software company could have been buoyed by Pushpay's announcement of expressions of interest, being one of the few companies belonging to the NZX's tech sector.

Fletcher Building rounded out the top movers, rising 1.0 per cent.

Restaurant Brands was the biggest underperformer, decreasing 2.9 per cent. This downward movement may have been influenced by the recent fall in discretionary consumer spending.

The a2 Milk Company fell 2.6 per cent. This could be linked to a level of uncertainty in the Chinese economy, with widespread Covid-19 restrictions and testing measures currently being applied in the country, which has caused a slow in consumer demand for milk products and infant formula.

Closing out the bottom movers was Fonterra Shareholders' Fund, reducing 2.5 per cent yesterday.

Westpac announced its third interest rate rise for home loans this month. The net effect of these rate increases has seen their one-year and two-year interest rates incline 80 bps and 40 bps in April, respectively.

Australia

The ASX 200 declined 2.1 per cent yesterday with a 155.3 point drop, setting a new 20-day low at 7,318.0.

All 11 sectors closed in the red. Materials decreased 5.1 per cent, energy declined 4.0 per cent and information technology dropped 1.7 per cent.

Virgin Money was the top performer of the day increasing 2.3 per cent and commercial real estate company Unibail-Rodamco-Westfield rose 2.1 per cent.

Nufarm completed the outperformers up 1.9 per cent after releasing its earnings update for the first half of 2022. The agricultural chemical company expects to report underlying earnings before interest taxes, depreciation and amortisation (EBITDA) of between A$320 million and A$340 million. The update also noted that the maximum exposure of inventory and receivables held in Russia and Ukraine was less than 2 per cent of total Group inventory and receivables.

Conversely, pre-paid financial cards issuer EML Payments was the biggest underperformer, plummeting 38.6 per cent after releasing its profit guidance yesterday. Guidance of FY22 EBITDA was reduced by roughly 8 per cent to between A$52 million and A$55 million. Mining services company Mineral Resources dropped 9.9 per cent after announcing a proposed offering of up to US$1 billion in senior unsecured notes.

Lastly, Global metal recycling and innovative recycling solutions company Sims Limited rounded out the underperformers with a decline of 9.5 per cent.

The Australian Bureau of Statistics released its 2020-21 financial year government finance statistics. Total Australia general government net debt reached 38.1 per cent of GDP and total public sector borrowing was A$212.4 billion.

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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