Stock markets in Europe advanced as investors eye more rate cuts to revive growth on the continent, while Wall Street was mixed with the first of the Magnificent 7 companies earnings reports kept traders on edge over artificial intelligence investment plans.
The European Central Bank lowered its benchmark interest rates by a quarter point to 2.75% s expected, and kept the door open to further reductions. That buoyed rate sensitive stocks with Germany’s DAX 30 up 0.4% and France’s CAC 40 advancing 0.9% while the UK’s FTSE 100 jumped 1% with mining companies on the rise as gold futures prices climbed to a record, up 1.2% at US$2,845 an ounce at 7am in Auckland.
“The (European Central) Bank described its monetary policy stance as ‘restrictive’, signalling more easing is coming, but not pre-committing to any rate path,” Bank of New Zealand senior interest rate strategist Stuart Ritson said in a note. “The market is pricing close to three further 25 basis points cuts by the end of the year.”
Across the pond stock markets were mixed with the Nasdaq down 0.1% after Microsoft’s cloud computing growth disappointed investors, raising questions for investors about the extent of investment in AI after the ructions caused by the emergence of Chinese startup DeepSeek. Nvidia was also weaker. The Dow Jones Industrial Average was up 0.3% in afternoon trading.
United Parcel Service slumped 14% after it projected a decline in revenue for the year as it scales back the amount of business it does for Amazon, its biggest customer.
Meanwhile, Tesla, Meta Platforms and IBM rallied after their earnings announcements and investors are eyeing up reports from Apple and Intel after the close of trading.
Open wallets
US data showed the world’s biggest economy grew at a 2.3% annualised pace in the December quarter, with consumer spending underpinning the expansion, while separate figures showed initial US jobless claims came in below expectations.
The US Federal Reserve kept its benchmark rate unchanged yesterday, with chair Jerome Powell saying the central bank's not in a rush to cut further.
The kiwi dollar traded at 56.51 US cents at 7am from 56.55 cents yesterday.
Dealmakers in the US were thrown a curveball after the Department of Justice moved to block Hewlett Packard Enterprise’s US$14 billion purchase of Juniper Networks, in its first action under the new pro-deal US administration of President Donald Trump.
Across the Atlantic, Reuters reported that broadcaster ITV was in early talks with Abu Dhabi-backed RedBird IMI about a possible merger of their businesses, centred on their production businesses.
Meanwhile, Nikkei reported Japanese trading house Soljitz will buy Australian developer Capella Capital Partnership in a deal worth A$470 million, and the Australian Financial Review’s Street Talk reported the owners of the Kinetic bus group are considering spinning out the Australasian businesses for sale after bids for the whole group last year fell short of expectations.
Locally, the ANZ consumer confidence survey is due for release, while across the Tasman December producer price figures are scheduled and earnings are due Origin Energy, Syrah Resources and ResMed.
And New Zealand’s government is expected to launch its minerals strategy today.
Reporting by Paul McBeth. Image from Christian Lue on Unsplash.