Jarden brief: Consumer confidence continues to fall as does NZ company earnings

The Warehouse Group reported a fall in net profit after tax to $50.4 million in the first half of its 2022 financial year. Photo / Paul Taylor

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

New Zealand

The NZX 50 finished Tuesday's trading session up 0.2 per cent, closing at 12,204.7 points.

EROAD was the frontrunner as the freight technology company posted a 6.1 per cent gain. Scales Corp turned a corner yesterday, recovering from its fall at the start of the week, to finish up 2.8 per cent. Healthcare distributor EBOS Group continued its strong start to the week, rising 2.6 per cent yesterday.

Electricity generation and retail company Meridian Energy was the day's largest underperformer, falling 2.2 per cent. Next in line was A2 Milk supplier Synlait Milk, declining 2.1 per cent. Mainfreight rounded off the bottom movers, down 1.7 per cent yesterday.

The Warehouse Group reported a fall in net profit after tax to $50.4 million in the first half of its financial year 2022, down 8.2 per cent compared to last year. First-half sales fell 4.3 per cent to $1.73 billion, likely impacted by lockdown restrictions. The company which owns The Warehouse, Warehouse Stationery, Noel Leeming, Torpedo7 and TheMarket.com, specified its Auckland stores were closed for 46 per cent of total trading days during the half. On the flip side, online sales grew 67.8 per cent, accounting for 19.4 per cent of total sales.

Consumer confidence continues to fall, with the Westpac McDermott Miller consumer confidence index finding more New Zealanders that were pessimistic about the economic environment than those optimistic. The index, released on Tuesday, shows a decrease of seven points to 92.1 in the March quarter - the lowest consumer confidence level on the Westpac Index since the 2008 Global Financial Crisis.

On Tuesday, the number of daily Covid-19 cases outside Auckland reached an all-time high of 16,616 cases.

Cabinet is expected to announce a decision later today regarding any developments to the country's Covid-19 rules.

International

US

All major US indices were in the green at the time of writing. The S&P 500 was up 1.0 per cent, the Nasdaq rose 1.6 per cent and the Dow Jones Industrial Average gained 0.8 per cent. This comes after a volatile day on Monday and more time to digest US Federal Reserve Chair Jerome Powell's latest rate hike comments.

All but one of the sectors were in the green. The biggest gains came from communication services (+2.2 per cent), financials (+1.8 per cent) and consumer discretionary (+1.8 per cent). Conversely, energy was down 1.0 per cent.

Orthodontics manufacturer Align Technology and e-commerce company Etsy were the top performers, rising 5.0 and 4.7 per cent, respectively.

Online dating service company Match Group rose 4.6 per cent after launching a dating app for single parents on Monday. The app, called Stir, is meant for connecting single parents that "are oftentimes underserved on mainstream dating apps," the company said in a release.

At the time of writing, The Mosaic Company dropped 3.6 per cent after reaching a 52-week high yesterday. This may be seen as a slight correction for the fertiliser producer.

Oil and gas exploration specialist Occidental Petroleum decreased 2.8 per cent. Energy company Hess Corporation rounded out the laggards with a decline of 2.7 per cent.

Business media have been reporting on speculation that investors have urged BuzzFeed CEO Jonah Peretti to shut down the company's news organization. BuzzFeed News has around 100 employees and loses about US$10 million a year, according to news outlets. Sources have reportedly said they are concerned the division is weighing down the company and one investor believes shutting it down could add up to US$300 million of market capitalisation to the struggling stock.

Tesla CEO Elon Musk opened a new factory in Germany. The Berlin factory is said to produce up to 500,000 vehicles annually. This is Tesla's first manufacturing plant in Europe with the rationale being to take pressure off its other factories in the US and China.

Rest of the World

Asian markets were in the green overnight. The Shanghai Composite was up 0.2 per cent, Nikkei increased 1.5 per cent and the Hang Seng rose 3.2 per cent.

European markets were also in positive territory. The FTSE inclined 0.3 per cent, the DAX was up 0.8 per cent and the CAC gained 1.2 per cent.

Commodities

Gold traded 0.4 per cent lower to US$1,922.90 per ounce and silver dropped 1.4 per cent to US$24.95 per ounce.

Oil edged slightly lower, down 0.1 per cent to US$112.06 per barrel.

The cryptocurrency market was largely in the green, with Bitcoin having risen 3.7 per cent and Ethereum gaining 2.7 per cent.

The US 10-year Treasury rate rose six basis points to 2.372 per cent alongside a five-basis point gain in the 30-year rate, to 2.585 per cent.

Australia

The ASX 200 increased 0.9 per cent on Tuesday, finishing at 7,341.10 points.

Although the index experienced a gain yesterday, most of the sectors each closed in the red. Led by information technology and industrials, down 1.3 and 0.7 per cent, respectively. The best performing sector was materials, up 3.3 per cent (+6.7 per cent across the past five days), followed by energy gaining 1.7 per cent yesterday.

Liontown Resources was yesterday's top performer, rising 6.3 per cent. The robust performance builds on Monday's positive performance.

Global resources company BHP Group increased 5.1 per cent, which could be buoyed by rising commodities prices.

Mining services company Mineral Resources closed out the top movers, inclining 4.8 per cent yesterday.

Atlas Arteria was the biggest underperformer on Tuesday, declining 5.3 per cent.

Location services provider Life360 appears to have experienced some correction after Monday's good performance, closing 4.8 per cent lower.

Fintech company Zip rounded out the bottom movers, falling 4.1 per cent.

Building material company Boral has suffered from the recent floods in Queensland and New South Wales. The company announced impacts of the flooding will result in a A$23 million loss to the group's 2022 earnings. Boral's share price dropped 2.3 per cent on Tuesday.

• 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