This equities slide comes as concerns that the Federal Reserve might continue to raise interest rates were heightened following a higher than expected November ISM Services Index (a purchasing managers’ index).
The index posted a 56.5 per cent reading, topping the Dow Jones estimate of 53.7 per cent and increasing from October.
All sectors were down with consumer discretionary, financials and energy leading the market downwards, falling 2.2, 2.0 and 1.8 per cent respectively.
VF Corporation, the owner of brands such as The North Face and Timberland, was the worst performer at the time of writing, down 9.6 per cent after it announced its CEO was retiring and produced guidance with lowered expectations for revenue and earnings in the second half of next year.
Electric vehicle giant Tesla slid 5.1 per cent after Bloomberg first reported that Tesla planned to cut output of its Model Y by more than 20 per cent in its plant in Shanghai this month.
Rest of the World
European stocks were a mixed bag with the STOXX 600 down 0.2 per cent and the FTSE 100 up 0.2 per cent.
Asian markets closed higher as China relaxed some Covid-19 restrictions. The Hang Seng surged 4.5 per cent, the Shanghai Composite rose 1.8 per cent and the Nikkei increased 0.2 per cent.
Commodities
Brent Oil is currently trading 1.0 per cent lower at US$84.70 a barrel amidst US Federal Rate worries, while gold is trading down 1.6 per cent to US$1,769.60 per ounce.
Treasury yields rose to start the week with the US 10-year Treasury bond up 2.2 per cent to a yield of 3.58 per cent.
Bitcoin still remains below the US$20,000 mark, although up 0.3 per cent to US$17,064.00.
New Zealand
The NZX 50 Index was in the green, up 0.3 per cent yesterday.
Trading for last week’s S&P/NZX Indices quarterly rebalance occurred yesterday. The rebalance announced Vulcan Steel as replacing Eroad in the NZX 50, which saw Eroad decline 5.7 per cent and Vulcan Steel increase 2.7 per cent.
Synlait Milk rose 6.9 per cent, Pacific Edge increased 3.3 per cent and Stride Property gained 2.8 per cent as the top performers of the session. Synlait Milk’s rise followed its annual shareholders meeting on Friday.
NZ King Salmon is facing another hurdle as a think tank funded by property developer Willis Bond yesterday also filed an appeal alongside the Department of Conservation’s appeal of the resource consent for NZ King Salmon’s proposed Cook Strait salmon farm.
The NZX statement did not give details of the grounds for appeal.
NZME closed up 0.8 per cent, yesterday confirming its support for legislation requiring global digital platforms to pay NZ media to publish news online.
Australia
The ASX 200 also traded up 0.3 per cent on Monday. Basic materials led the charge – up 2.0 per cent – followed by energy and real estate, increasing 1.5 and 0.7 per cent respectively.
Retail store owner Metcash’s first half financial year 2023 earnings were released.
Group revenue rose 8.2 per cent and group underlying earnings before interest and tax increased by 10.3 per cent. The increase in earnings and financial position saw the interim dividend increase 9.5 per cent. Metcash rose 0.2 per cent yesterday.
The Australian Retailers Association increased its pre-Christmas spending forecasts, now predicting a record A$66 billion will be spent in the November to December Christmas trading period, up 6.4 per cent on last year’s spending.
While some of this increase can be attributed to inflation, retailers will likely remain optimistic that spending will hold on for now.
Miner IGO experienced a fire on Saturday, which affected the company’s Nova Operation over the weekend.
The fire damaged the 10MW Nova power station. All operations at Nova are currently suspended.
Subject to permitting and approval, it is anticipated mining operations at Nova will be able to recommence in two weeks. IGO declined 4.9 per cent yesterday.
Coming up today
Locally there is the Delegate Group annual shareholders meeting. In Australia, the RBA Cash Rate Target will be released and the Bank of Queensland will hold its annual general meeting. The Trade Balance will be released in the US.
For more information on the latest market moves, get in touch with Jarden.
All market pricing and announcements are sourced from Refinitiv, NZX and ASX.
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