Crypto revival stokes gains on Wall St; NZX welcomes Locate

Stocks on Wall Street rallied as crypto currencies bounced back from a sharp selloff, buoying the likes crypto-related companies such as Strategy, Circle Internet and Robinhood, and ahead of the NZX-listing of Bitcoin buyer Locate Technologies.

Expectations remain firm that the Federal Reserve will cut its benchmark interest rate when it reviews policy next week, while US President Donald Trump will probably announce the central bank’s new chair next year, with economic adviser Kevin Hassett said to have the inside running.

Across the Atlantic, stock markets were mixed as UK banks rallied on the Bank of England’s loosening of capital requirements for lenders, while Germany’s Bayer surged on a US Solicitor-General supporting its petition to the Supreme Court to limit legal claims against its Roundup weedkiller.

And local dairy companies such as Fonterra’s Shareholders’ Fund and Synlait Milk will be in focus after prices fell at the latest Global Dairy Trade auction, while across the Tasman, Australia’s September quarter gross domestic products figures are awaited.

Here comes the bounce

Crypto currencies rallied from their sharp selloff earlier this week with Bitcoin up 7% at US$91,482 at 7am in Auckland, and Wall Street’s fear gauge – the volatility index – slipping 3.4% with investors in a better mood amid firm expectations for the Federal Reserve to cut the federal funds rate a quarter-point next week.

US President Donald Trump said he’ll probably announce the replacement for Fed chair Jerome Powell next year, with his economic adviser Kevin Hassett said to be the favoured choice.

Stocks on Wall Street gained, with the tech-heavy Nasdaq Composite leading the major indices as it rose 0.4%, with crypto related stocks such as Circle Internet, Strategy and Robinhood among the gainers. Chipmaker Nvidia was also on the green side of the ledger.

“As US markets opened overnight, risk appetite was higher, with a strong recovery in Bitcoin, which has sustained a lift of 6% to be back over US$91,000,” Bank of New Zealand senior markets strategist Jason Wong said in a note. “US equities opened stronger, with the more speculative areas outperforming, including IT stocks.”

Meanwhile, Boeing led the S&P 500 higher, up 9.1%, after the plane maker outlined the pathway to recovery, with positive free cash flow in the low single digits predicted for next year.

The S&P 500 was up 0.1% in late trading, while the Dow Jones Industrial Average advanced 0.2%.

Capital changes

Stock markets were mixed across the Atlantic, with the UK’s FTSE 100 edging down as miner Fresnillo led the benchmark lower, while banking companies including Lloyds Banking Group gained after the Bank of England eased capital requirements for lenders.

Germany’s DAX 30 rose 0.5%, led by a 12% surge for Bayer after the US Solicitor-General supported the pesticide company’s petition to the Supreme Court to limit legal claims against its Roundup weedkiller.

France’s CAC 40 dipped 0.3%.

The kiwi dollar was unchanged at 57.27 US cents at 7am in Auckland from yesterday, following an eighth straight decline in dairy product prices at the latest GDT auction. The GDT index fell 4.3% with an average price of US$3,507 a tonne. Butter prices dropped 12% to US$5,169 a tonne, while whole milk powder prices slipped 2.4% to US$3,364 a tonne.

BNZ’s Wong said the expanding global supply has been the key driver for the declines, with no sign of it abating.

Futures are pointing to a 0.1% increase for the S&P/ASX 200 index when trading opens across the Tasman, with September quarter GDP the key data release in Australia. The kiwi dollar traded at 87.37 Australian cents from 87.41 cents yesterday.

There’s no major data scheduled on this side of the Tasman, while software company Locate Technologies, which operates a Bitcoin treasury strategy, will join the NZX today. Software investment company Enprise is also holding its annual meeting.

Reporting by Paul McBeth. Image from Pierre Borthiry - Peiobty on Unsplash.