Stock markets in Europe and the US joined the global rally as investors weigh up the flurry of executive orders issued on the first day of Donald Trump’s new US administration, with a major infrastructure announcement due later in the day.
Germany’s DAX 30 gained 0.3% at 7am in Auckland and the UK’s FTSE 100 was up 0.3%, while Wall Street’s S&P 500 rose 0.8%, continuing the rally that started in Asia once the second Trump administration got into gear.
Markets were whipsawed yesterday by Trump’s comments that tariffs on Mexico and Canada could come in as early as February after earlier reports indicated any new regime would follow a review of various trading relationships.
Canada’s outgoing prime minister Justin Trudeau said his country would respond to any tariffs, while Mexico’s President Claudia Sheinbaum stressed the importance of having a cool head.
“On day one of Trump’s presidency the market got a taste of things to come over the next four years, with some off-the-cuff comments during a signing of executive orders that jolted the market,” Bank of New Zealand senior markets strategist Jason Wong said in a note. “One positive factor though to come on day one was that China doesn’t seem to be in the crossfire for tariffs immediately and Trump said he wasn’t considering an immediate universal tariff.”
Chinese markets were stronger yesterday, while European luxury stocks – which typically wax and wane with Chinese consumer sentiment – were stronger, led by a 5.3% gain in Burberry.
AI investment is coming
Having signed a slew of executive orders, Trump is due to announce multi-billion-dollar private sector investment to build artificial infrastructure in the US, according to a CBS News report, with SoftBank chief Masayoshi Son, OpenAI’s Sam Altman and Oracle’s Larry Ellison expected at the White House on Tuesday.
Locally, Statistics New Zealand is due to release the December quarter consumers price index, which is expected to show a slowing pace of annual inflation and keeping the Reserve Bank on track to cut the official cash rate in February.
The kiwi dollar traded at 56.65 US cents at 7am from 56.55 cents yesterday.
Meanwhile, the milk prices rose at the latest Global Dairy Trade auction, snapping declines as the previous two events. The GDT price index rose 1.4% with an average winning price of US$4,4146 a tonne, with whole milk powder prices up 5% at US$3,988 a tonne.
Dairy Companies Association of New Zealand figures on Monday showed milk production rose 2.1% to 1.92 billion kilograms of milk solids in 2024, the highest level in five years.
Elsewhere in the primary sector, the Wall Street Journal reported Singapore’s Olam Group is close to finalising a deal to sell its remaining stake in its agricultural products business, Olam Agri, to Saudi Agricultural and Livestock Investment Co, while Smithfield Foods is targeting a valuation of up to US$10.73 billion in its initial public offering in the US.
Reporting by Paul McBeth. Image from Dennis Zhang on Unsplash.