NZ returns from holiday to jubilant mood on Wall St

New Zealand markets return from the long Labour weekend to an upbeat mood among investors, with stocks on Wall Street rallying on optimism US President Donald Trump will cut a trade deal with his Chinese counterpart Xi Jinping when they meet later this week.

Tech stocks were broadly stronger in the US with chipmaker Qualcomm leading the S&P 500 higher as it surged on news it will supply its latest artificial intelligence chips to Saudi Arabia-backed AI firm Humain.

Meanwhile, Argentina’s peso rallied against the greenback, the South American government’s bonds yields pushed lower and US-listed Argentine companies gained as investors took heart from President Javier Milei shoring up control of the legislature and continue with his free market reforms.

And New Zealand’s Labour Party has announced it will campaign on a narrow capital gains tax at next year’s general election after national broadcaster Radio New Zealand obtained leaked details of the policy over the long weekend.

New records

Stocks on Wall Street hit new highs, with the S&P 500 up 1% in late trading and the tech-heavy Nasdaq Composite advancing 1.7% as investors grow increasingly optimistic the meeting between US President Donald Trump and his Chinese counterpart Xi Jinping will deliver a trade deal after weeks of tension between the world’s two biggest economies.

American and European stock markets carried on the jubilant tone in Asia, after Trump announced trade deals with Malaysia and Cambodia, and frameworks for future agreements with Thailand and Vietnam.

“US and Asian equity indices have reached fresh record highs, after encouraging signs from negotiations between the US and China, ahead of a leaders summit this week,” Bank of New Zealand senior interest rate strategist Stuart Ritson said in a note. “China is expected to delay introducing export controls on rare earths which had previously triggered a sharp escalation in tensions between the two countries.”

Qualcomm led the S&P 500 higher in late trading, climbing 13% after saying it will supply its latest AI chips to Humain, the startup backed by Saudi Arabia’s Public Investment Fund.

Tech stocks were broadly stronger in the US session, with investors keeping an eye on the upcoming results from Alphabet, Apple, Amazon, Microsoft and Meta Platforms.

Pay up

Tesla rallied 5.5% as chair Robyn Denholm urged shareholders to back the compensation package for chief executive Elon Musk at next month’s annual meeting, warning the firm could lose its leader if they vote it down.

Across the Atlantic, stock markets were also stronger with the UK’S FTSE 100 nudging up 0.1%, Germany’s DAX 30 gaining 0.3% and France’s CAC 40 increasing 0.2%.

London Stock Exchange Group gained after saying it’s working with AI startup Anthropic to give Claude users access to its data through licensed products

Meanwhile, Argentine President Javier Milei shored up control of his nation’s Congress in the midterm elections, paving the way for him to continue with his free market reforms. The Argentine peso advanced 4.2%, while the yield on the government’s 2046 bond dropped almost 2 percentage points to 7.56% and US-listed companies such as lender Banco Macro and oil company YPF rallied on Wall Street.

Things are looking more muted in the antipodes, with Australian futures pointing to a 0.4% decline for the S&P/ASX 200 index when trading opens across the Tasman. The Aussie benchmark stock index gained 0.4% when New Zealand’s S&P/NZX 50 index was closed for the Labour day holiday.

The kiwi dollar traded at 57.64 US cents at 7am in Auckland from 57.56 cents yesterday, and fell to 87.93 Australian cents from 88.14 cents.

Local data today include Statistics New Zealand’s filled jobs report for September, while Rua Bioscience is holding a virtual annual meeting today.

And the opposition Labour Party rushed out an announcement it will campaign on a narrow capital gains tax at next year’s general election, capturing gains on sales of commercial property or residential property excluding the family home set at a 28% rate. Farms, KiwiSaver funds, shares, business assets, inheritances and personal items would be exempt.

Reporting by Paul McBeth. Image from Esmonde Yong on Unsplash.