Mounting expectations for the US Federal Reserve to resume cutting interest rates buoyed stock markets on both sides of the Atlantic, with UnitedHealth Group and Nike among those leading Wall Street’s Dow Jones Industrial Average.
Meanwhile, demand for crypto initial public offerings remains hot, with Peter Thiel-backed exchange Bullish more than doubling on its New York Stock Exchange debut.
And animal spirits are seeping into legacy media with Paramount Skydance – fresh from its UFC broadcasting deal – surging 42% in what’s seen as potentially the latest meme stock.
Locally, earnings season continues with cinema analytics firm Vista Group International is poised to report its first-half result.
Having your cake
Stocks on Wall Street and in Europe were stronger as investors firm up their expectations for the Federal Reserve to cut the federal funds rate at next month’s review. US Treasury secretary Scott Bessent floated the prospect of a 50 basis point cut in an interview on Bloomberg TV given the weakness in employment figures.
The kiwi dollar rose to 59.72 US cents at 7am in Auckland from 59.57 cents yesterday, the yield on US 10-year Treasuries fell 4 basis points to 4.25%, and Wall Street’s fear gauge – the Volatility Index – fell 1.4% to 14.53, its lowest level since early 2022.
“The positive performance for risk assets has corresponded with a fall in implied volatility across equities, bonds and currencies,” Bank of New Zealand senior interest rate strategist Stuart Ritson said in a note. “A 25 basis point-cut at the September FOMC (federal open market committee) is fully discounted by market pricing and there is a total of 64 basis points of easing priced by December.”
The S&P 500 was up 0.2% in late trading, with the tech-heavy Nadaq Composite nudging up 0.1%, while the blue chip-laden Dow Jones rose 0.9% led by health insurer UnitedHealth Group and footwear giant Nike. The UK’s FTSE 100 increased 0.2% and Germany’s DAX 30 gained 0.7%.
Paramount SkyDance surged 42% in heavy trading, with the newly merged entity getting called the latest meme stock by CNBC’s Jim Cramer, although there wasn’t much chatter on the WallStreetBets Reddit forum. The media group rallied earlier this week after announcing a seven-year deal with TKO Group Holdings for exclusive rights to UFC events in the US.
Hungry for listings
Crypto-exchange Bullish, backed by billionaire Peter Thiel, more than doubled in its NYSE debut, recently trading at US$76.81, having lifted its offer price to US$37 in raising US$1.1 billion as crypto IPOs continue to attract strong demand. Bitcoin increased 1.7% to US$121,660.
Sharesies favourite RocketLab dipped 1.9% after chief executive Peter Beck told Nikkei Asia he expects countries across Asia to follow Japan’s lead in recognising the importance of the space sector.
Japan’s Axelspace debuted on the Tokyo Stock Exchange yesterday, surging 80% to 674 yen in its first day of trading.
The upbeat tone is set to extend into the antipodes, with Australian futures pointing to a 0.4% increase for the S&P/ASX 200 index when trading opens today.
Australia’s ASX 200 fell 0.6% yesterday after Commonwealth Bank of Australia shed 5.4% as investors rethought the lender’s lofty valuation in the wake of its annual result.
Earnings season continues Downunder, with Vista and dual-listed Ventia Services scheduled to report. Across the Tasman, results from insurer Suncorp Group and Origin Energy are also due.
No local data are scheduled for today.
Reporting by Paul McBeth. Image from Behnam Norouzi on Unsplash.