Ebos earnings under the microscope as Wall St bounces back

New Zealand’s earnings season continues at pace today with Ebos Group to capture the most attention as investors have soured on the health products maker, while Meridian Energy rounds out results from the major power companies.

Australian futures indicate the S&P/ASX 200 index will follow Wall Street’s recovery as the tech sector recovers from the latest bout of nervousness about artificial intelligence shaking up the business models of various sectors, with the Magnificent 7 megacaps broadly stronger ahead of Nvidia’s quarterly result and as Meta Platforms cut a US$100 billion deal to buy AI chips from Advanced Micro Devices.

US President Donald Trump is poised to deliver his state of the union address to the combined houses of congress where he’s expected to talk up the health of the world’s biggest economy and reveal new measures to cut costs for households.

And Japan’s yen extended declines amid reports prime minister Sanae Takaichi raised concerns about higher interest rates in a meeting with Bank of Japan governor Kazuo Ueda.

Rude health

New Zealand’s S&P/NZX 50 index will likely take its lead from Ebos Group’s result today, with analysts predicting the health and animal products maker will report a 4.6% increase in earnings. Ebos shares have dropped 13% so far this year as investors remain sceptical about its ability to deliver the savings needed to achieve earnings growth.

“People are pricing in a weak result and if their earnings are in line with expectations, it could be quite positive,” said Matt Goodson, managing director at Salt Funds Management.

Meridian Energy is also due to report, following strong results from other electricity generator-retailers as they bounce back from the dry year in the prior period, while Steel & Tube Holdings and fruit exporter Scales Corp are also in the diary.

Gentrack will hold its annual meeting virtually, where its owners will get a gauge on the looming competitive threat from Octopus Energy’s Kraken and the expanding reach of AI.

That comes as Wall Street bouncedsback from its latest bout of fear over AI, with the tech-heavy Nasdaq Composite up 1.1% in late trading.

Circling chips

Most of the Magnificent 7 megacap stocks were stronger after Meta Platforms agreed to a chip supply deal with AMD, which includes warrants for the social media giant to buy as much as 10% of the chipmaker’s stock.

Nvidia’s quarterly result on Wednesday is also looming large, with the chipmaker expected to exceed expectations again.

The S&P 500 rose 0.8% in late trading, while the Dow Jones Industrial Average was up 0.9%, led by software firm Salesforce and International Business Machines.

Stock markets across the Atlantic were more mixed with the UK’s FTSE 100 and Germany’s DAX marginally weaker, while France’s CAC 40 increased 0.3%.

Investors continued to digest the latest US tariffs with US President Donald Trump’s executive order coming into effect at the lower 10%, not the 15% level mooted in the president’s Truth Social posts over the weekend.

Trump will deliver his state of the union address today, where he’s expected to talk up the health of the economy and reveal new measures to ease costs that households are facing.

Australian futures are pointing to a 0.5% gain for the ASX200 when trading opens across the Tasman, with WiseTech Global’s results on the calendar.

The kiwi dollar traded at 59.70 US cents at 7am in Auckland from 59.62 cents yesterday, and rose to 92.96 yen from 84.39 yen.

Japan’s currency was knocked yesterday amid growing tensions between Japan and China, with new export restrictions on critical minerals and other goods with potential military use announced by China’s Commerce Ministry. The yen was further knocked by reports prime minister Sanae Takaichi expressed concerns about rising interest rates in a meeting with Bank of Japan governor Kazuo Ueda.

No major local data are scheduled today, while across the Tasman, Australian inflation figures are due.

Reporting by Paul McBeth. Image from Harold Mendoza on Unsplash.