BNZ-parent NAB earnings loom as Wall St bounces back

National Australia Bank – the parent of the Bank of New Zealand – is the next major lender to report this season as credit grows across the Tasman, although the major banks are trading at what some see as stretched valuations.

That comes as investment sentiment recovered overnight, with stocks in the US and Europe back on the rise as fears over the artificial intelligence trade subside, helping buoy the likes of chipmaker Nvidia and its fellow Magnificent 7 megacap stocks.

A stronger-than-expected private payrolls report in the US prompted a selloff in US government bonds, with the yield on 10-year Treasuries nudging higher, while President Donald Trump’s administration urged an end to the federal government shutdown after some Democrat victories in some local elections.

And the US Supreme Court is hearing a case challenging the lawfulness of the White House’s expansive tariff regime, which upended the global trade order.

Pillar two

The National Bank of Australia is poised to report its earnings today, following Westpac Banking Corp earlier this week, having fattened its margins in the third quarter and growing its lending. FactSet analysis predicted the Australian lenders came into the reporting season with solid momentum and high expectations, noting that growth might slow in the 2026 financial year and that the major banks are trading at elevated valuations.

That comes as investor sentiment recovered from the tech rout yesterday, with Australian futures pointing to a 0.7% gain for the S&P/ASX 200 index when trading opens across the Tasman.

Stocks on Wall Street were stronger in late trading, with the tech-heavy Nasdaq Composite up 1% as the likes of Nvidia, Tesla and Amazon were on the green side of the ledger, while the S&P 500 gained 0.8%.

McDonald’s advanced after the fast-food chain lifted sales in line with analysts’ expectations, benefiting from a push into value meals as households feel the pinch of rising costs.

Bitcoin poked its nose below US$100,000 yesterday as some big holders of the cryptocurrency sold down their stakes, but was up 3.2% at US$103,911 at 7am in Auckland amid the recovering investor confidence.

Private eyes

Meanwhile, the yield on US 10-year Treasuries rose 8 basis points to 4.15%, nudging above the New Zealand equivalent’s 4.09% yield, after ADP private payrolls showed a stronger increase in jobs growth than anticipated, while the ISM services index showed a healthier recovery in activity than anticipated.

The extended federal government shutdown has left the Federal Reserve reliant on private datasets, and US President Donald Trump blamed the protracted standoff for the Democrat victories in Virginia and New Jersey governor electoral races.

“During the US government shutdown the market has been starved of official US economic data, which has resulted in an unusually large reaction to the ADP payrolls report, an indicator that has a poor record for forecasting monthly non-farm payrolls, worse than simple time series techniques, and the ISM services report, which has been a poor indicator of gyrations in economic activity,” BNZ senior markets strategist Jason Wong said in a note.

The kiwi dollar traded at 56.60 US cents at 7am in Auckland from 56.53 cents yesterday.

Investors were also watching the challenge against the legality of the White House’s wide-ranging tariff regime in the US Supreme Court, with prediction market Polymarket giving a 31% chance of the justices ruling in favour of the administration.

Across the Atlantic, stock markets were stronger with the UK’s FTSE 100 up 0.6% ahead of the Bank of England policy review, while Germany’s DAX 30 gained 0.4% and France’s CAC 40 nudged up 0.1%.

Denmark’s Novo Nordisk dropped 4.5% after the weight loss drugmaker cut its sales and earnings outlook as it faces increased competition for its pioneering Ozempic and Wegovy drugs.

There’s no major local data scheduled for today, while Allied Farmer and Vital Healthcare Property Trust hold their annual meetings today.

Reporting by Paul McBeth. Image from Ian Hutchinson on Unsplash.