Wall Street investors pulled themselves off the ground in overnight trading, with the main indices bouncing back from yesterday’s slump in the wake of the Federal Reserve’s view that interest rates will stay higher next year.
The Standard & Poor’s 500 index rose 0.2% in early afternoon trading in the US, with banks including JPMorgan Chase and tech stocks Nvidia and Amazon among those boosting stocks on Wall Street.
European markets slumped as investors caught up with the Fed’s new view, with the UK’s FTSE 100 sliding 1.1% and Germany’s DAX 40 falling 1.4%.
Meanwhile, the Bank of England kept its benchmark bank rate unchanged at 4.75%, in line with expectations, while Norway’s Norges Bank kept its key rate 4.5% and Sweden’s Riksbank cut its benchmark rate a quarter-point to 2.5%.
The kiwi dollar remained under pressure having touched a fresh 26-month low yesterday, trading at 56.43 US cents at 7am in Auckland from 56.31 cents at 5pm yesterday. The local currency dropped after the Fed’s new rate view and sank further after local September quarter gross domestic products figures shrank much more than expected.
A mixed bag
Bank of New Zealand senior markets strategist Jason Wong said the headline figure was worse than predicted, but that historical revisions meant it started from a higher base.
“Measured against the RBNZ’s November forecasts, the level of economic activity was 0.6% higher than expected, even if the more recent period showed a much deeper downturn,” Wong said in a note. “The ANZ business outlook survey confirmed optimism for the year-ahead in the face of lower interest rates.”
Agriculture was a bright spot in the local GDP figures with the dairy sector enjoying rising milk prices.
Meanwhile, California has declared a statement of emergency as the US state detects more H5N1 bird flu cases in its dairy herd.
Locally, Statistics New Zealand will release merchandise trade figures for the month of November while ANZ’s consumer confidence survey is due.
And minnow wine company Marlborough Wine Estates will hold its annual meeting, where shareholders will vote on whether to delist from the NZX, which it expects will save $270,000 a year.
Reporting by Paul McBeth. Image from Robert Bye on Unsplash.