Share Markets

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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Aussie up, Kiwi down, dairy dip

4.5.22 US equity markets remain choppy and currently show a modest gain, following a strong late rally yesterday. The US 10-year rate has pushed slightly lower after returning to the 3% mark. The AUD has been the best major since this time yesterday, although the net gain came ahead of a hawkish policy update alongside the RBA’s first rate hike this cycle, says Jason Wong at BNZ Markets. The NZD hit a fresh near 2-year low last night, but now shows a small gain from his time yesterday, while...

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Market attention on US Fed this week

2.5.22 Global rates moved sharply higher again on Friday, following upside surprises to US wage data and European core inflation. The Fed is almost universally expected to raise its cash rate by 50bps this week, but the market has moved to price an almost 50% chance of a 75bps hike (!) in June, says Nick Smyth at BNZ Markets. “The prospect of aggressive central bank tightening and underwhelming earnings outlooks from Amazon and Apple saw the S&P500 and NASDAQ plunge by around 4%, capping...

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NZ dollar drops after OCR change

14.4.22 Global rates have shown further signs of stabilising overnight on hopes that inflation may be close to peaking, notes BNZ Markets. The US 10-year Treasury rate has fallen to around 2.68%, helping to boost equity markets and driving a fall in the USD, says Nick Smyth “Both the RBNZ and Bank of Canada have delivered 50bps rate hikes over the past 24 hours. Despite the 50bps hike, the RBNZ’s statement was seen as ‘dovish’ relative to very elevated market expectations and NZ rates and the...

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Bond market sell-off sustained

11.4.22 Newsflow was light on Friday but the great global bond market selloff continued, with the US 10-year rate reaching a fresh three-year high of 2.73%, notes BNZ Markets this morning. The USD reached its highest level in nearly two years before ending the day flat, says Jason Wong, senior markets strategist. Against a backdrop of slightly weaker risk appetite, the NZD was the worst performer on Friday, down 0.6% for the day to just under 0.6850. “The week ahead is a busy one, with policy...

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RBA sits tight on low cash rate

Aussie holds low flight path on cash rate 5.4.22 The Reserve Bank of Australia decided to maintain the cash rate target at 10 basis points and the interest rate on Exchange Settlement balances at zero per cent. But the tone of the statement hinted at a possible rate rise not at what it contained but what it did not include . The RBA dropped previous comment that it is  ‘prepared to be patient’ before raising interest rates. The ASX 200 was quick to give back most of its gains, commented...

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 US sharemarkets were firmer on Monday.

Oil producers fell in response to a 7% slide in the oil price, said CommSec. “And bank stocks fell 1.0% in response to lower longer-term yields. Reuters reported "Electric-car maker Tesla jumped 8.0% after saying that it will seek investor approval to increase its number of shares to enable a stock split." “Shares in Apple rose 0.5% after a report said the company was planning to cut iPhone and AirPod output.” The Dow Jones index rose by 95 points or 0.3%. The S&P 500 index rose by 0.7%...

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International markets firm up

European sharemarkets were firmer on Tuesday, reported CommSec. The strongest gain was by banks, up 2.5%, in response to rising bond yields. Insurers rose 2.0% and autos lifted by 1.6%. “Money markets are now pricing in around 50 basis points of rate hikes by the European Central Bank (ECB) by the end of the year.” The pan-European STOXX 600 index rose by 0.9%. The German Dax index rose by 1.0%. And the UK FTSE index lifted 0.5%. In London trade, shares in Rio Tinto fell by 1.6% and BHP shares...

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New York eases, Europe mixed

22.3.22 US sharemarkets fell on Monday after US Fed chair Jerome Powell flagged more aggressive monetary policy tightening. Futures now suggest a 60.7% chance of a 50 basis point rate hike at the next meeting in May, notes CommSec. “At the same time oil prices lifted near 7%. “Shares of Boeing slid 3.6% after one of its 737-800 aircraft operated by China Eastern Airlines crashed in southern China with no apparent survivors.” The Dow Jones index closed lower by 202 points or 0.6%. The S&P...

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Stronger 3rd quarter for FedEx

21.3.22 FedEx  has reported that third quarter operating income improved due to higher revenue per shipment and a net fuel benefit at all transportation segments. Revenue rose to $236 bn from $21.5bn in the pcp, and net income reached US$1.1bn vs $892m. Earnings per share improved to US$4.20 from US$3.30. The quarter's results also benefited from lower variable compensation expense and less severe winter weather, resulting in favourable year-over-year comparisons. The improved results were...

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Equity markets bounce

10.3.22 The New Zealand sharemarket responded in kind this morning after Wall Street stocks leapt higher in a decisive bounce, just to further confuse a highly volatile week. The US market saw all indices higher, noted CommSec. “The Dow Jones index closed up by 654 points or 2% after being up 825 points at session highs. The S&P 500 index lifted 2.6%, posting its best day since June 2020. “And the Nasdaq index added 460 points or 3.6%, its best trading session since November 2020.” The NZX...

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A volatile day on Wall St

8.3.22 The rolling financial impact of the Russian invasion of Ukraine has torn through northern hemisphere markets today and delivered a relatively mild sideswipe to NZ’s sharemarket. As at 2.30pm the NZX50 was at around 11,786.27, down 127 points, and had been higher at 12.30 pm (11,830). It does amount to a 1.07% knock. That can be favourably compared to the -2.37% fall of 797.42 points incurred by the Dow Jones index on Wall Street overnight. On the NYSE, shares in global companies fell...

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Massive rally in global rates

Risk appetite has soured and some turmoil in money markets is flowing through into bond markets, resulting in a massive rally in global rates, according to BNZ Markets. Global equities are much weaker and the VIX index has risen to its highest level in over a year. Oil prices are surging to fresh highs, says senior markets strategist Jason Wong. Downward pressure remains on European currencies, while the other majors are fairly well contained. The NZD has performed well under the circumstances...

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Market report 25.2.22

      After the broad equity sell-off in the initial shock realisation that diplomatic denials can still become brutal facts in the 21st Century, global markets went back up today. Wall Street’s Dow Jones industrial average managed a wan 92.07 point gain at 33,223.85, which was just a slice of the fall on Thursday NZT. London’s FTSE-100 rallied almost exactly the same, up 93 to 7.301.23. And in New Zealand the NZX50 rallied 190.83 at 11,923.38. A few hours after markets closed...

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Markets react to Russian move

23.2.22 Risk sentiment has improved since the NZ close, as the world tries to assess Russian President Putin’s next move, after his first step towards a war with Ukraine, says BNZ Markets. US equities are down for the day, but not as much as early trading in futures suggested. The US 10-year rate has headed back up towards the 2% mark. The NZD, AUD and EUR have outperformed overnight, with the NZD up to 0.6750 ahead of the RBNZ MPS today. BNZ Markets senior markets strategist Jason Wong says,...

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City of London matches market

21.2.22 City of London’s net asset value total return was 6.9%, slightly ahead of the index benchmark and the averages for the UK equity income investment trust and OEIC sectors. Net asset value (“NAV”) per ordinary share for the first half year of 2021 is 404.4p, compared with 2020’s 387.6p. UK equities continued to benefit from the recovery in corporate profits and dividends and produced a total return of 6.5%, as measured by the FTSE All-Share Index. The UK economy, benefiting from very...

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Market risk appetite improves

16.2.22 The fear of war between Russia and Ukraine has subsided a little on fresh developments, seeing a lift in risk appetite, driving up global equities and global rates and a chunky fall in oil prices, says BNZ Markets this morning. Currency movements have been modest, but the NZD and AUD show small gains while, not surprisingly, the euro has outperformed, notes Jason Wing, senior markets strategist. The market has been focused on geopolitical news around Russia and the Ukraine of late and...

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Equity markets weaker

4.2.22 US sharemarkets were weaker on Thursday, dragged lower by technology stocks. In response to weak earnings guidance, shares in Facebook owner, Meta Platforms, fell by 26.4%. CommSec reports shares in Amazon fell 7.8% ahead of its earnings results. At the close of trade, the Dow Jones index was down 518 points or 1.5%. The S&P 500 index lost 2.4%. And the Nasdaq index fell by 539 points or 3.7%. “European sharemarkets were weaker on Thursday in response to weak US technology sector...

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Plunge in Meta Platform value

4.2.22 Technical stocks reeled in conjoint misery as shares in one of the global equity giants Meta (formerly known as Facebook) plunged on a worryingly lower results. Earlier today, NASDAQ was down 2.6%, giving back some its recent strong rally, while the S&P500 is down 1.7%. Social media giant Meta reported a decline in daily active users for the first time which saw its share price collapse 26.50% to US$237.41 (subject to updating) which is a wipe-off of $225bn in equity value. CNN...

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Hawkish tone gets louder

4.2.22 The hawkish shift among global central banks continues. BNZ Markets reports that European rates have spiked higher overnight, and the EUR is much stronger, after ECB President Lagarde refused to rule out a rate increase this year. Nick Smyth comments “ In the UK, four Bank of England MPC members voted for a 50bps rate increase at its meeting overnight (the five other members voted for 25bps). “Higher UK and European rates have flowed through to higher US Treasury rates and we should see...

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NZ dollar consolidates position

3.2.22 Market moves have been relatively modest overnight ahead of the ECB and Bank of England meetings tonight and nonfarm payrolls on Friday night, notes BNZ Markets. “US equities have pushed slightly higher while the US 10-year rate has drifted lower,” says Nick Smyth. “The NZD and AUD have consolidated after their strong gains over the past few days.  NZ rates moved lower yesterday after the HLFS labour market data weren’t as strong as some had feared.” Equity markets continue to recover...

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Stunning Wall Street rise out of sell-off

25.1.22 Financial markets have been through a wild and dramatic night (NZ time) as equity traders unbundled stocks on to the US and London stock exchanges only to reverse upwards in the last hour of trading. At one point the US NYSE market looked likely to be in a dive of 1,000 points. But the sell-off was then seen as a buy opportunity. The Dow Jones has remarkably closed up 99.13 points at 34,364.52. CNN reported a “stunning turnaround just before the closing bell.” Stocks began the day with...

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