Jarden Brief: Russia-Ukraine tension hits stocks again

The world remains on edge due to the tensions between Russia and Ukraine. Photo / Getty Images

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

New Zealand

The NZX 50 rose 1.1 per cent yesterday.

Serko led the index upwards, rising 6.5 per cent. EBOS gained 4.3 per cent following its half year 2022 result announcement on Wednesday. Oceania Healthcare continued its recovery, up 3.7 per cent.

On the flip side, donations payment provider Pushpay Holdings fell 2.0 per cent and Tourism Holdings declined 1.5 per cent.

Skellerup fell 1.4 per cent following the release of its first half 2022 results. Revenue was up 10 per cent, earnings before interest and tax rose 18 per cent, and net profit after tax increased 20 per cent on the prior comparable period. Guidance was provided for net profit after tax of $44-47 million for financial year 2022.

In a trading update and profit forecast, Hallenstein Glasson advised that total group sales for the six-month period ended 1 February 2022 were $170.6 million, a decrease of 6.2 per cent over the prior corresponding period. Group unaudited profit after tax is projected to be in the range of $11.1 million - $12.1 million. Covid-19 impacted performance with store closures due to lockdowns. Hallenstein Glasson fell 4.3 per cent yesterday.

Fonterra has agreed on a strategic partnership with the NZX and the European Energy Exchange. Subject to approvals, the partnership is expected to be completed mid-2022, with each holding an equal one-third stake in the Global Dairy Trade auction platform.

International
US

The major US indices were all trading lower at the time of writing, as Russia-Ukraine tensions intensify. The S&P 500 declined 1.2 per cent, the Dow Jones Industrial Average was down 1.1 per cent, and the NASDAQ decreased 1.7 per cent.

Consumer staples and energy were the only two sectors in the green on Friday morning, increasing 0.5 and 0.4 per cent, respectively. Technology and communication services were booking the biggest losses, each decreasing 1.9 and 1.5 per cent.

The best single stock performer on the S&P 500 at the time of writing was oil and gas explorer and producer Marathon Oil increasing 5.8 per cent, hitting a 52-week high.

Next in line were digital infrastructure company Equinix and precious metal explorer Newmont, rising 4.4 per cent each.

Equinix released its fourth quarter 2021 results on Wednesday to which the market reacted favourably on Thursday and the share price continued its upwards trend at the time of writing.

Newmont is set to announce its earnings today (Thursday in US time).

Walmart also performed well, trading 2.7 per cent higher. The retail giant released its earnings before market open and raised its annual dividend to US$2.24, which is a 2.0 per cent increase on the last fiscal year dividend of US$2.20. Walmart's net sales exceeded US$150 billion for the quarter and adjusted earnings per share for the quarter came in at US$1.53. The company is also planning a share repurchase program of at least US$10 billion in FY23.

Leading the index lower was specialty chemicals producer Albemarle, dropping 17.3 per cent. The company delivered better than expected earnings for its fourth quarter, however, its outlook for 2022 was mixed as "capital expenditures are anticipated to be higher than previously planned".

Vehicle products distribution holding company LKQ also underperformed, declining 12.4 per cent, after its earnings announcement before market open.

Rounding out the bottom movers was Tyler Technologies, trading 7.1 per cent lower. The company provides integrated information management solutions and services for the public sector.

Rest of the World

The performance of the major Asian indices was mixed overnight. The Shanghai Composite rose 0.1 per cent, the Nikkei declined 0.8 per cent, and the Hang Seng closed 0.3 per cent higher.

Commodities

The gold price benefitted again from investors looking for less risk, driving the gold futures price up 1.6 per cent to US$1,900.80 per ounce.

Oil remained volatile, decreasing 1.8 per cent Friday morning, to US$92.02 per barrel.

Cryptocurrencies were underperforming across the board. Bitcoin dropped 5.3 per cent and Ethereum declined 6.1 per cent.

The US 10-year treasury rate was yielding 1.979 per cent, a slight decline from our previous report.

Australia

The ASX 200 closed slightly higher on Thursday, up 0.2 per cent to 7,296 points.

The premiers of New South Wales (NSW) and Victoria, Dominic Perrottet and Daniel Andrews, announced they would drop density limits in crowded offices, with NSW also ending work from home orders and QR code check-ins for shared office spaces.

Healthcare was the champion sector, up 3.0 per cent (and 5.0 per cent over the last five days), joined by energy which gained 0.9 per cent.

Reporting season was again the most influential factor on single stock movements, with holding company IPH leading the market (+9.2 per cent), with fund manager Challenger (+6.7 per cent) and biotech company CSL (+5.1 per cent) all benefactors of positive half year earnings results.

CSL is one of the ASX's large cap healthcare companies, with a current value of over A$133 billion, meaning its 5.1 per cent gain helped prop-up overall sector and index gains.

Against a rising tide, the laggard sectors at Thursday's close were consumer discretionary (-3.4 per cent) and telecommunications (-3.0 per cent).

Wesfarmers, another large cap company and parent to stores like Bunnings and Kmart, dropped 7.5 per cent after it announced half year results, which included a reduction in interim dividend by 9.0 per cent. Rounding off the underperformers were EV battery producer Novonix (-6.3 per cent) and real estate company Domain Holdings (-6.2 per cent).

In other news, electricity company Origin Energy has decided to bring forward the closure of Australia's largest coal fired plant, Eraring, by seven years to 2025.

• 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