Share Markets

KIwi steady on quiet session

10.8.22. It has been another quiet trading session with little newsflow, and market nerves ahead of tonight’s key US CPI report, notes BNZ Markets. US equities are lower and the US Treasuries curve shows further inversion against a backdrop of modestly higher rates. Currency movements have been modest, said Jason Wong, senior market strategist. Another profit warning from a semi-conductor company, this time Micron Technology, highlighted a rapid falloff in demand as customers reduce their...

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Choppy day on US market

US sharemarkets were choppy on Monday, noted CommSec. “Investors digested news that the US$430 billion Inflation Reduction Act had passed the Senate. “Automakers rose 3-4% in response to the news with shares in Ford up 3.1% and General Motors up 4.2%. The Information Technology sector lagged. “Chipmaker Nvidia Corp slid 6.3% as the company said it expects second-quarter revenue to decline 19% from the prior quarter due to weakness in gaming.” The Dow Jones index rose by 29 points or 0.2% after...

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AIFC earnings bound ahead

25.7.22 Australian Foundation Investment Corporation reported preliminary annual results today and said Long term performance remains sound despite recent dislocation in markets. AIIC has maintained final dividend at 14 cents per share fully franked bringing total fully franked dividends applicable for the year to 24 cents per share, the same as last year. Full Year profit was $360.6m, up from $235.1m in FY21, including a dividend of $74.9m resulting from the BHP Petroleum/Woodside merger....

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PMI nudges US equities

25.7.22 “US equities headed lower after the release of US PMI data, with the S&P500 ending down almost 1% and the NASDAQ down almost 2% on Saturday. “Adding to the negative sentiment towards tech stocks, Twitter and Snap reported disappointing earnings results, the latter plunging almost 40% and spilling over into other social media and tech firms, such as Meta (-7.6%) and Google’s parent Alphabet (-5.8%), with investors wondering whether it could signal a broader softening in online ad...

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Italy crisis shadow over Euro

21.7.22 Italian politics have come back into the limelight overnight, with Draghi’s government on the verge of collapse after the major coalition parties withdrew their support. Italian bonds have sold off and the EUR has come under pressure but there haven’t been any major spill overs to broader markets. Indeed, US equities are higher on the day while the US 10-year rate has pushed up to 3.04%. The NZD is broadly unchanged over the past 24 hours, despite the fall in the EUR.  It’s a...

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Kiwi dollar breaks higher

20.7.22 Risk appetite is stronger overnight, with large gains in both European and US equity markets (S&P500 +2.5%), according to BNZ Markets. The EUR is almost 1% higher while European rates have increased after reports the ECB will consider a 50bps hike at this week’s meeting and announce its anti-fragmentation tool for supporting peripheral bond markets, says Nick Smyth. “The NZD has appreciated in sympathy with the EUR, breaking through the 0.62 mark overnight. “The EUR has continued...

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ANZ capital raise to fund new bid

18.7.22 ANZ Banking Group today launched a capital raise to help fund a surprise acquisition of Suncorp Bank. The cash sale is valued at A$4.9 billion. This represents $1.3bn of goodwill paid above net tangible assets. And a 1.3x P/NTA. It also represents a P/E of 13.8x pre synergies or 9.3x3 post full run-rate synergies. Acquisition is to be funded by a fully underwritten 1 for 15 pro rata accelerated renounceable entitlement offer to raise ~$3.5b of ordinary equity and by existing capital....

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Kiwi dollar firms up

18.7.22 Markets ended what was another very volatile week on a positive note, with the S&P500 rebounding almost 2% and most commodity prices increasing, notes BNZ Markets. “Long-term inflation expectations from the University of Michigan’s survey came in lower than expected while Fed officials appeared to downplay the prospect of a 100bps hike later this month, supporting lower global rates, says Nick Smyth. “The USD pulled back from a 20-year high as risk appetite improved, helping the...

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US inflation rate centre stage

15.7.22 US equities are weaker after fully digesting the CPI shocker and not helped by weaker earnings from two major banks, says BNZ Markets. The US Treasuries curve has unwound some of yesterday’s flattening, after Fed Governor Waller backed a 75bps hike, with him needing to see stronger data before backing a larger 100bps hike, notes Jason Wong, senior markets strategist. “Italian political manoeuvres saw EUR dip further below parity before recovering. Both the NZD and AUD hit fresh...

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Sour sentiment-Euro at 20-year low

6.7.22 Risk sentiment has soured as global recession fears grip the market, says BNZ Markets this morning.   “US and European equity markets are weaker, global rates are lower, many commodity prices have tumbled more than 5%, and the USD has surged over 1%.,” says Jason Wong. The NZD and AUD fell to fresh 2-year lows overnight, while the EUR and GBP have performed even worse, the former down to a 20-year low. “After a long weekend, US market participants have returned in a bad mood with...

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MARKETWEEK:  Brighter stars for equities this week

The stars of Matariki (Courtesy NASA) 26.6.22 // Warren Head // The big economic questions of the month continue to swirl around inflation, interest rates, recession. But it’s time for a break from the repetitiveness of the drip-drip newsflow. Not that it’s easy just to find a Matariki hideaway (at any sort of reasonable rack rate, anyway) and entirely go off the grid. The mid-winter business pulse is a bit depressing with consumer and building confidence low. The shortages of building...

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Quieter week ahead after a wild ride

20.6.22 On Friday, net changes in equities and rates were modest by recent standards, but this capped off a wild week in markets, comments Jason Wong, senior markets strategist at BNZ Markets. That saw US and European equities down in the order of 4-6%, and the US 10-year rate trade in a 35bps range. “ In currency markets the yen came under pressure as the BoJ made no tweaks to policy, maintaining its ultra-easy policy stance, against the global trend. “ Oil prices plunged and other...

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Flurry of market moves – equities slide

17.6.22 There have been some chunky moves in financial markets, in the aftermath of the super-sized 75bps hike by the Fed yesterday, says Jason Wong, senior markets strategist at BNZ Markets this morning. The Fed’s move was followed up by a 25bps hike by the BoE and a surprise 50bps hike by the Swiss National Bank. US and European equities are significantly weaker, global rates are mostly higher. The USD has taken a big tumble despite the risk-off backdrop. CHF, GBP and JPY lead overnight...

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Markets fall again but to lesser extent

15.6.22 American sharemarkets continued to lose ground overnight – albeit at a significantly smaller level. The Dow Jones Industrial Average – which had fallen heavily the previous day – shed a further 152 points at 30,205 , a drop of only 0.50%, while the tech-heavy Nasdaq almost held its ground, down 19 at 10828. The S%P 500 shed 14 points at 3735. Investors are expecting a larger rate hike at this week's Federal Reserve interest rate meeting. “The broad-market S&P 500 see-sawed through...

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Markets jumpy ahead of Fed decision

15.6.22 Global rates continue to soar as the market prices in more aggressive policy tightening ahead, says BNZ Markets this morning. “A 75bps hike by the Fed this week (is) now seen as a shoo-in, and now a good chance priced that the RBNZ does the same next month,” comments Jason Wong, senior markets strategist at BNZ Markets. “US equities have been choppy, trading in and out of positive territory. The USD DXY index has traded up to a fresh 20-year high. “The NZD traded down to a fresh 2-year...

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US investors fear rate hikes

14.6.22 US sharemarkets slumped again on Monday with investors fearing that aggressive inflation-fighting rate hikes could tip the economy into recession, notes CommSec. Reuters reported "Cryptocurrency- and blockchain-related stocks, including Riot Blockchain, Marathon Digital Holdings and Coinbase Global, all plunged as bitcoin slumped more than 10% after major US cryptocurrency lending company Celsius Network froze withdrawals and transfers citing "extreme" conditions." The Dow Jones index...

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US market had one direction to go

14.6.22 \\ US stocks only had one way to go after inflation fears intensified and raised the risk of stronger tightening by the Fed and a much sooner recession, says Edward Moya, senior market analyst, The Americas, for OANDA this morning. “Wall Street is facing a plethora of negative headlines, but the problem is that until we see a deterioration with credit conditions and market functioning, the Fed has the greenlight to tighten as much as possible to get inflation under control “An ugly...

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Asian markets follow US lower

Hong Hong's market turns negative 13.6.2   Higher US inflation data prompted a mass sell-off of equity markets in the US and Europe. The S&P 500 slumped by 2.91%, the Nasdaq tumbled by 3.52%, and the Dow Jones fell by 2.73%. “Things aren’t looking any better with US futures in Asia today, as the selling continues, perhaps with one eye on the weekend crypto meltdown,” comments Jeffrey Halley, senior market analyst, Asia Pacific at OANDA. “A market perpetually looking for reasons to...

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Kiwi and Aussie dollars rise

A notable market move overnight has been broad-based weakness in the USD, with higher risk appetite and a weak ADP payrolls print thrown into the mix, says BNZ Markets this morning. Strength in commodity prices have supported the NZD and AUD both well up over 1%, says Jason Wong, senior markets strategist. US Treasury yields have been well contained, even with more hawkish talk from Fed Chair Brainard. “Risk sentiment is positive for reasons not obvious and this is reflected more in equities,...

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Inflation fears increase

1.6.22 Inflation has returned as the market’s focus, given yesterday’s shocking German CPI data and followed up by a record lift in euro area CPI inflation, says BNZ Markets this morning. . European rates are up for a second day running, and the US 10-year rate is up 10bps from Friday’s close, after the Monday holiday. “The higher rates backdrop means that there has been no follow through of last week’s strong rebound in US equities, investors adopting a more cautious tone,” notes Jason Wong,...

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Receding recession fears lift US market

30.5.22 Risk assets ended last week on the strong note (S&P500 +2.5%) as global recession concerns appeared to diminish, notes BNZ Markets this morning. This helped drive a strong rally in the NZD and other commodity currencies, the NZD closing above 0.65 for the first time since early May, says Nick Smyth. Global rates were flat-to-lower on Friday while NZ short-term rates pushed higher again, with the market continuing to digest the RBNZ’s hawkish messaging from last week’s MPS. Last...

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Stagflation fears hang over markets

23.5.22 Markets remain dominated by stagflation concerns at present, with inflation at multi-decade highs in most countries, central banks set on rapidly tightening monetary policy, and recession fears mounting, notes BNZ Markets. The S&P500 briefly crossed over into bear market territory on Friday, fanning recession fears, before recovering late in the session to end unchanged. Despite the late recovery, risk appetite remains very cautious, and investors remain concerned about the outlook...

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New government in Australia

22.5.22 The Australian Labour Party, and PM-elect Anthony Albanese, have won the Australian Federal Election but may not be a  majority government. How will the ASX react to the change of government? The new Labour government will thus depend on the cross-benches, Labour comprising mostly Green and independents, so-called “TEAL’ MPs (who did upset the grip of the ruling Liberal Party. At time of writing (10am Sunday) the Labour Party have about 71 seats with 76 a clear majority – and the...

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Markets firm up at weekend

Risk assets ended last week on a positive note, with equities rebounding strongly on Friday from their heavy falls earlier in the week. News that Shanghai was planning to start removing restrictions this week was taken positively by the market although the rebound was likely as much to do with a correction from oversold levels as a change in investors’ economic outlook., says Nick Smyth at BNZ Markets. “Global rates and commodity currencies rebounded as well, with the NZD ending the week back...

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Euro plunges, Kiwi down, on recession fears

13.5.22 Markets remain firmly in risk-off mode as concerns grow that the global economy is heading towards a recession, notes BNZ Markets this morning. “The unfolding energy crisis in Europe, concerns that Beijing could be plunged into lockdown at any point, and expectations of aggressive rate hikes from central banks are all weighing on sentiment,” says Nick Smyth at BNZ Markets. “Equity markets continue to tumble, with the S&P500 down another 1.8% overnight, to now be on cusp of a bear...

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Big bounce for CSR in March year

11.5.22 Building materials group CSR Limited (ASX:CSR) has had a strong March 2022 year with net profit after tax for the year of A$193m, up 20% from the previous year. CSR Managing Director & CEO Julie Coates said, “All of CSR’s businesses have performed very well during the year. “In Building Products, our team worked hard to support the demand in residential housing with strong operational execution. “The organisational change we have made streamlining the business over the last 18...

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Turnaround in equities; currency weak

1.5.22 There has been something of a turnaround in risk sentiment overnight, with equities bouncing back from their recent heavy falls, notes BNZ Markets. Long-term global rates have fallen amidst lower market-implied inflation expectations, with US 10-year rate back below the 3% mark and the German 10-year rate below 1%, says Nick Smyth. The improvement in risk sentiment hasn’t done much to help the NZD however, which has hit a fresh year-to-date low below 63 cents. “Beaten up tech stocks...

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Markets tumble catches Kiwi dollar

Global equities and industrial commodities continue to tumble on rising global growth concerns, with heavy losses seen across all the major equity indices overnight, notes BNZ Markets this morning “The CNY has continued its recent sharp downtrend while the NZD and AUD have fallen more than 1%, with both hitting fresh lows for the year,” comments Nick Smyth. “US Treasury rates have fallen back amidst the risk-off backdrop, although the 10-year rate continues to trade above 3%. “There hasn’t...

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Broad losses on ASX

6.5.22 The Australian sharemarket experienced its largest decline in two and a half months, with the S&P/ASX 200 sliding by 2.2 per cent or 159 pts, to 7206, comments CommSec. Today’s weakness was driven by a sharp selloff overnight in the US, which reflected investor concerns over the US Federal Reserve’s ability to tame soaring inflation. Locally, losses were broad based with every sector, excluding the defensive Consumer Staples sector, losing at least 1.5 per cent. For the ninth time...

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Rally reverses into massive fall

A sharp rise in US interest rates following a reassessment of the US Federal Reserve’s stance on the magnitude of further rate hikes has torpedoed gains on Wall Street¸ in a massive market reversal. In first reaction to yesterday’s Fed rates hike of 50 basis points (to only 1%) being unlikely to be followed by an even bigger (75bps) rise next month all markets rallied .  The Dow Jones jumped 932 points. Now, equities have given back all their post-FOMC rally, and then some, with massive falls...

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