Jarden Brief: Oil companies wipe out on weak China economy, Disney has stellar day

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

International

US

All major US indices were in the green at the time of writing. The S&P
500 was up 0.4 per cent, the Nasdaq increased 0.5 per cent and the Dow Jones Industrial Average rose 0.5 per cent.

Sectors were mostly in the green with nine out of 11 rising. Consumer staples was up 1.0 per cent, utilities rose 0.6 per cent and consumer discretionary increased 0.5 per cent.

Conversely, energy dropped 2.5 per cent alongside the oil price, and materials lost 0.4 per cent.

Illumina was the top performer, surging 9.5 per cent after the biotechnology company’s share price dropped last week when it reported earnings that missed expectations.

Biotechnology company Gilead Sciences rose 4.8 per cent. This comes after a trial showed that its drug Trodelvy improved the survival rate of metastatic breast cancer patients. Tesla rounded out the top performers with a rise of 3.6 per cent.

On the other hand, energy related stocks slumped after China reported weak economic data. Halliburton dipped 4.1 per cent, Schlumberger was down 4.0 per cent and Valero Energy declined 3.6 per cent.

In other news, Moderna increased 2.9 per cent after the biopharmaceutical company gained UK approval for its updated Covid-19 vaccine which it said targets both the original virus and the Omicron variant.

Walt Disney was up 2.6 per cent. The hedge fund Third Point, led by activist investor Daniel Loeb, announced it had taken a new stake in the company.

Rest of the World

Asian markets were mixed overnight. The Shanghai Composite traded flat, the Nikkei rose 1.1 per cent, and the Hang Seng fell 0.7 per cent.

European markets were in the green. The FTSE increased 0.1 per cent, the DAX was up 0.2 per cent and the CAC gained 0.3 per cent.

Commodities

Gold traded 1.1 per cent lower to US$1,796.10 per ounce, while silver dipped 2.2 per cent to US$20.24 per ounce.

Oil also traded lower, declining 3.3 per cent to US$89.08 per barrel.

The cryptocurrency market was in the red, with Bitcoin having declined 0.7 per cent and Ethereum down 1.7 per cent.

The US 10-Year Treasury rate slid six basis points to 2.79 per cent alongside a two basis point decline in the 30-year rate, to 3.097 per cent.

New Zealand

The NZX 50 started the week positively, closing 0.5 per cent higher, ahead of the Reserve Bank’s interest rate decision on Wednesday.

The bigger question lies in how much more tightening the RBNZ projects for the path ahead.

New Zealand’s largely anticipated earnings season began with electricity and gas supplier Contact Energy, which announced its full-year result yesterday.

Contact revealed that its annual profit had dropped 2.6 per cent to $182 million in the year ending 30 June, compared to $187 million in the previous period.

The electricity company also announced it would invest $300 million into a new geothermal power station. Contact Energy closed yesterday’s trading session up 1.4 per cent.

Leading the index was engineered product manufacturer Skellerup Holdings, which rose 3.5 per cent.

Next in line was travel management company Serko, up 3.3 per cent. Air New Zealand also edged upwards, trading 3.0 per cent higher yesterday.

On the flip side, real estate companies Stride Property Group and Property for Industry fell 2.7 and 2.1 per cent respectively. Property for Industry announced yesterday it had appointed Carolyn Steel to its board, as a non-executive director effective from the 22 August.

Rounding out the bottom movers was biotech company Pacific Edge, down 1.9 per cent.

My Food Bag (-7.5 per cent), which trades outside of the NZX 50, informed investors that inflation and a slowing economy have caused customers to downgrade to its cheaper meal-kit option, lowering the company’s earnings over the past four months.

Australia

The ASX 200 closed in the green yesterday, up 0.5 per cent to 7,064.3 points.

Nine of the 11 sectors finished higher. Australian real estate investment trusts led with a 2.0 per cent increase and consumer discretionary rose 1.4 per cent.

Conversely, energy and financial were the laggard sectors, reducing 0.8 and 0.2 per cent respectively.

Iron ore mining and mineral exploration company Champion Iron was the index’s top performer, advancing 6.4 per cent. The company will hold its annual shareholders meeting next week on 25 August.

Online automotive advertising company Carsales.com also performed well, lifting 5.8 per cent.

The company delivered strong 2022 full year earnings results, buoyed by a surge in advertising.

The reported revenue was 19.0 per cent higher than the previous period at A$509 million and earnings before interest, tax, depreciation and amortisation rose 12.0 per cent to A$270 million.

The company also lifted its final dividend by 9.0 per cent to 24.5 cents per share.

Rounding out the top movers was real estate investment trust company GPT Group, inclining 5.3 per cent. This movement represents the company’s best single day performance since February 2021 and follows the release of their 2022 half year results.

Oil & gas exploration and production company Beach Energy was the index’s biggest underperformer, regressing 11.1 per cent following the release of its 2022 full year result.

Investors were seemingly disappointed by the production outlook that was lower than expectations. Yesterday was the stock’s worst single day performance since April 2021 but the company is still 30.6 per cent higher year to date.

Financial technology company Zip declined 8.5 per cent, down 74.0 per cent year to date. The company will release their 2022 full year results on 23 August.

Closing out the bottom movers was Bendigo and Adelaide Bank, decreasing 8.3 per cent.

The company’s net profit fell 7.0 per cent and they noted an uncertain outlook as rising rates effect property market valuations.

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