The US Nasdaq climbed 1.8%, crossing the 20,000 mark for the first time, as tech stocks rallied on expectations that the pace of US inflation won’t derail the path to lower interest rates.
Stock markets on both sides of the Atlantic were broadly stronger as traders raised their expectations for the Federal Reserve to cut the fed funds rate by a quarter-point to a range of 4.25% to 4.5% when it reviews policy next week. Meanwhile, north of the US border, Canada’s S&P/TSX rallied after the Bank of Canada cut its key rate 50 basis points to 3.25%.
“Although the Fed is expected to make its third consecutive 25bp cut to interest rates, the trajectory next year is less certain as the disinflation process has stalled and economic activity remains resilient,” Bank of New Zealand senior interest rate strategist Stuart Ritson said in a note.
Gold prices and Bitcoin were both stronger, while Brent crude oil also rose as the Organisation for Petroleum Exporting Countries trimmed its outlook for demand amid further delays to expanding output.
Exxon Mobil slipped 0.8% after the biggest US oil company laid out a six-year strategy to drive earnings growth, including plans to build a liquid natural gas-powered plan to supply electricity to data centres.
Google-parent Alphabet rallied on the launch of a new artificial intelligence system, while General Motors declined after dropping its robotaxi programme and tweaking its autonomous vehicle strategy.
Mondelez International’s pursuit of chocolate maker Hershey’s appears to be short-lived with Bloomberg reporting that the controlling shareholder rejected the early bid.
Meanwhile, healthcare stocks on Wall Street including Cigna, CVS Health and UnitedHealth were weaker after the Wall Street Journal reported a bipartisan group of policymakers planned to introduce legislation to break up health insurers and pharmacy-benefit managers to divest their pharmacy businesses.
Closer to home, the Australian Financial Review’s Street Talk column reported three bids have been lodged for a 12.5% in CDC Data Centres – which counts Infratil as a cornerstone investor.
Statistics New Zealand is scheduled to release credit and debit card spending for November, while labour market figures are due across the Tasman.
The kiwi dollar slipped to 57.85 US cents at 7am in Auckland from 58.02 cents at 5pm yesterday after Asian currencies came under pressure amid reports Chinese authorities might let the yuan weaken next year in response to increased tariffs. The kiwi fell to 4.1999 Chinese yuan from 4.020 yesterday.
Reporting by Paul McBeth. Image by Tyler Prahm on Unsplash.
