Oil rises as markets wait for Strait of Hormuz deal; Rocket Lab earnings loom
NZ PM Luxon’s leadership is again in view.
Stocks on Wall Street eased from their highs on Monday, with oil prices rising as negotiations to reopen the Strait of Hormuz drag on as US President Donald Trump and Iran issued demands for compensation.
Sharesies favourite Rocket Lab dipped heading into its latest quarterly earnings, while SpaceX started the week on the red side of the ledger as retail investors turned net sellers of the conglomerate on Friday.
Across the Tasman, the Reserve Bank of Australia’s latest rate review is expected to keep policy unchanged as the latest oil price rally revived global inflation fears and pushed up government bond yields.
And New Zealand prime minister Christopher Luxon’s leadership of the National party is again in view, with reports that MPs will hold a special meeting tonight.
Still waiting
Brent crude oil futures rose 5% to US$87.72 a barrel at 7am in Auckland as investors keep waiting for Iran and Oman to finalise a deal to reopen the Strait of Hormuz. Iran has insisted on receiving compensation from the US and a withdrawal of the American naval blockade before reopening the channel, while US President Trump responded with his own demands of compensation.
Stocks on Wall Street were broadly softer on Monday, with the S&P 500 marginally weaker in late trading, while the tech-heavy Nasdaq Composite and Dow Jones Industrial Average were both down 0.3% in late trading.
Nvidia was among the main drags on the Dow, down 2.2% in late trading, as the chipmaker struck a deal with a host of Wall Street firms for a US$500 billion package to help fund the artificial intelligence infrastructure.
Meanwhile, Intel slid 3.7% on plans to sell US$15 billion of stock for its own AI infrastructure ambitions.
And a group of US House Democrats has written to Anthropic and OpenAI to explain how their AI systems broke out of their containment during a cybersecurity test, and hacked into other companies.
Bitcoin fell 2% to US$63,833 after crypto treasury firm Strategy was a seller of the cryptocurrency for a second week.
Into orbit
Rocket Lab slipped 3.2% at US$80.18 ahead of its June quarter update.
“Rocket Lab is down around 3% ahead of its results after the close, with the options market implying a move of approximately 10.4% following the announcement,” Moomoo market strategy consultant Greg Boland said in a note. “Investors will focus on Neutron development, launch timing, backlog conversion and defence contracts.”
Meanwhile, SpaceX was a touch softer as Vanda Research showed retail investors were net sellers of the space conglomerate for the first time since its debut in June, selling US$4.5 million of shares on Aug 7.
Tech companies including Meta Platforms, Alphabet’s Google and ByteDance’s TikTok lost an appeal in the San Francisco-based 9th US Circuit Court of Appeals to throw out thousands of lawsuits accusing the firms of designing products to be addictive to young users.
Across the Atlantic, stock markets were mixed as the UK’s FTSE 100 dipped 0.4%, while Germany’s DAX edged higher and France’s CAC 40 nudged up 0.1%.
The subdued tone is set to flow through to Australasia with futures pointing to a marginally weaker start for the S&P/ASX 200 index when trading opens across the Tasman. The kiwi dollar traded at 58.82 US cents at 7am from 58.86 cents yesterday.
The RBA is expected to keep its target cash rate at 4.35% when the central bank announces its latest policy update.
The latest rally in oil prices renewed inflation fears ahead of consumer and producer price data in the US, with the CME Group’s FedWatch tool indicating a 52% chance the Federal Reserve will hike its benchmark rate next month. The yield on US 10-year treasuries rose 4 basis points to 4.7%. New Zealand’s equivalent was at 4.68% at 7am.
Local data today include ANZ’s monthly truckometer gauge of traffic movements, while PGG Wrightson is due to report its annual result.
Meanwhile, New Zealand PM Luxon’s position as leader of the National party has again come into question, with the Politik website reporting the party’s caucus was calling for a special meeting as early as tonight.
Reporting by Paul McBeth. Image from Athanasios Papazacharias on Unsplash.
