Jarden Brief: US markets divided as investors evaluate company results

Shares in streaming company Netflix slumped 36.1 per cent at the time of writing. Photo / AP

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

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US

US markets were divided this morning as traders evaluated a rush of first-quarter results. The S&P 500 and Dow Jones Industrial Average are currently trading higher by 0.3 and 1.0 per cent respectively, whilst the Nasdaq trades lower by 0.7 per cent at the time of writing.

Sector gains include real estate and financials, each leading the way with 1.9 and 1.6 per cent increases. Communication services and consumer discretionary were the only sectors in the red, down 3.6 and 0.7 per cent.

Shares in streaming company Netflix slumped 36.1 per cent at the time of writing, after the company reported its first subscriber loss in more than a decade.

Netflix's January-March quarter report showed its customer base fell by 200,000 subscribers. This drop stemmed in part from its decision to withdraw from Russia in response to the conflict in Ukraine, which resulted in a loss of 700,000 subscribers, as well as the increase in competition from streaming service competitors. Netflix is hoping to recover some lost ground by creating a paid plan for households that share passwords/accounts, as well as considering a lower-cost subscription including advertising.

The scene set by Netflix dragged shares of other streaming companies lower. The Walt Disney Company, which runs the Disney+ service as well as Hulu, fell 3.9 per cent. Roku (-5.4 per cent) also followed the trend. Warner Bros. Discovery fell 5.3 per cent and sports-centered streaming service FuboTV had also lost 6.3 per cent at the time of writing.

Rounding out the bottom movers were technology companies Match Group and Enphase Energy, which decreased 8.6 and 7.6 per cent respectively. Match Group provides a wide array of digital dating platforms that include Tinder, Match and Hinge. There is speculation in the market around Match Group potentially adding another service.

On the flip side, the sector gains were well supported by the single stock winner M&T Bank, which posted a gain of 9.0 per cent at the time of writing. M&T Bank reported earnings of US$2.73 per share.

Next in line was IBM, which had risen 7.7 per cent at the time of writing. The technology services company issued first-quarter results, indicating that revenue increased 7.7 per cent in the period, compared with last year.

Media and advertising company Omnicom Group rounded out the top performers, with an increase of 5.2 per cent at the time of writing. Omnicom's earnings per share came in at US$1.39, which topped investors' expectations, despite taking a hit to its investments in Russian businesses.

Rest of the world

Asian markets were mixed overnight. The Shanghai Composite decreased 1.4 per cent, Nikkei rose 0.9 per cent and the Hang Seng fell 0.4 per cent.

All European markets closed in the green. The FTSE rose 0.4 per cent, the DAX increased 1.5 per cent and the CAC gained 1.4 per cent.

Commodities

Gold traded 0.3 per cent lower to US$1954 per ounce.

WTI Crude Oil performed well, rising 0.1 per cent to US$102.68 per barrel.

The cryptocurrency market was in the red, with Bitcoin decreasing 0.2 per cent and Ethereum down 1.1 per cent.

The US 10-year Treasury bond rate fell seven basis points to 2.847 per cent.

New Zealand

The NZX 50 rose by 1.2 per cent yesterday.

Fisher & Paykel Healthcare led the top movers, climbing 3.3 per cent. The a2 Milk Company gained 2.8 per cent and Mainfreight increased 2.7 per cent.

Conversely, leading the decliners was real estate investment company Argosy Property, losing 3.3 per cent.

Other underperformers were Stride Property Group losing 2.6 per cent and biotechnology company Pacific Edge, which fell 2.1 per cent.

Looking forward, the market is awaiting the March 2022 quarter CPI, to be released today. Economists are expecting inflation for the quarter to rise higher than the last quarter of 2021, to cross the 7 per cent mark. This is in the midst of upward pricing pressure globally with heightened commodity prices and supply chain pressures.

Australia

The ASX 200 increased marginally yesterday, up 0.1 per cent to 7569.2 points.

The healthcare sector led the market on Wednesday, increasing 2.6 per cent in connection with the top performing companies for the day. Consumer staples and consumer discretionary followed, having gained 1.2 and 1.1 per cent respectively. The materials and energy sectors declined the most, down 1.5 and 0.6 per cent respectively.

Ramsey Health Care, one of Australia's largest private hospital companies, surged 24.2 per cent yesterday to A$80 per share. This was on the back of a group of investors, headed by private equity and real estate firm KKR, making a non-binding offer of A$88 per share to acquire the company. This was approximately a 37 per cent premium to the share price at the time of the offer and would value the company at A$28 billion including debt.

Increases were also seen by the medical imaging company Pro Medicus Limited (+5.2 per cent), as well as the food and beverage ingredient supplier United Malt Group (+4.5 per cent).

Leading the underperformers yesterday was investment advice provider HUB24, down 6.5 per cent. Investors may be adjusting their valuation of the company after it missed expected results targets in its recent quarterly report.

Gold mining company Regis Resources and uranium producer Paladin Energy also fell by 6.2 and 4.3 per cent respectively.

New South Wales and Victoria have put an end to the seven-day isolation requirement for Covid-19 household contacts. State officials are still advising appropriate care to be taken when needed and note some restrictions remain in place, such as visitor restrictions in hospitals and other vulnerable settings.

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