Antipodes brace for cool Friday as Wall St eases from highs
KMD might be attracting some attention from across the Tasman.
Australian futures are pointing to a soft start to the trading day in the antipodes, as stocks on Wall Street fell from record highs, with investors waiting for more signs of a cooling in the Middle East conflict, while Polymarket prediction markets are getting closer to pricing in a better-than-even chance of a lasting peace sooner rather than later.
US corporate earnings powered the S&P 500 and Nasdaq Composite new highs this week, with strong results from artificial intelligence-linked firms reviving confidence in the dominant theme in the investing world and pushing NZX-listed Infratil to a record this week.
That hasn’t been all one-way traffic, with appliance maker Whirlpool tumbling by more than a fifth as the Middle East conflict squeezes margins and central banks around the world have been grappling with the threat of inflation becoming embedded beyond the initial fuel price increase.
Local data today include the Reserve Bank’s latest mortgage lending figures, while KMD Brands will be back in focus after Super Retail’s chief executive left the door open to looking at any opportunistic acquisitions that may emerge from the stricken retailer.
Nervous wait
Brent crude oil futures nudged up 0.3% to US$101.57 as investors wait for further details about the peace proposal put forward by the US, which is currently in the hands of Iran. Traders on the Polymarket prediction market have priced in a 40% chance of a peace deal by the end of this month, with 55% chance by the end of June.
“Global markets paused after recent gains, with equities easing from record highs while Brent crude rebounded as investors looked for signs the Middle East conflict is de-escalating,” Bank of New Zealand senior interest rate strategist Stuart Ritson said in a note. “Attention is on whether the US and Iran can restart talks aimed at ending the war.”
Energy prices dropped earlier this week when US President Donald Trump halted his naval operation in the Strait of Hormuz before the proposal was put forward to the Islamic Republic, spurring optimism among investors that triggered a rally in risk-sensitive assets across the world.
That’s since subsided, with stocks on Wall Street and in Europe cooler, and futures are pointing to a 1.6% slide for the S&P/ASX 200 index when trading opens across the Tasman today.
New Zealand’s S&P/NZX 50 index has gained 1.8% so far this week, spurred on by a 19% surge in Infratil’s share price after the infrastructure investor’s CDC data centres unit announced a multibillion-dollar contract.
The investment firm is one of the few local companies exposed to the AI theme, which has been buoying markets around the world.
Big tech
The tech-heavy Nasdaq was marginally weaker in late Thursday trading in the US, with the likes of Salesforce, Nvidia and Microsoft at the top of the leaderboard for the Dow Jones Industrial Average. The blue-chip index was down 0.7%, led by Caterpillar, JPMorgan Chase & Co and Merck & Co. The S&P 500 slipped 0.3%.
Whirlpool was one of the hardest hit companies on the day after slashing its annual guidance due to the Middle East conflict, while delivery company DoorDash dipped as mounting costs squeezed its profit. Airbnb and Coinbase are due to report after the bell.
The kiwi dollar remained well bid in the relative calm, trading at 59.55 US cents at 6am in Auckland from 59.62 cents yesterday.
Local data include the Reserve Bank’s monthly lending figures, while KMD Brands might attract attention after The Australian’s DataRoom column reported ASX-listed Super Retail chief executive Paul Bradshaw told the Macquarie Australia conference in Sydney that he would consider new acquisitions and wouldn’t rule out having a look at the New Zealand retailer’s assets.
KMD’s share price is in its fifth year of registering double-digit declines, and recently had to sell deeply discounted shares to shore up its balance sheet.
