Alphabet’s Google is fighting back against artificial intelligence firms encroaching on its search engine dominance, teasing a new subscription at its annual conference, although the Big Tech stocks were generally weaker in a soft day on Wall Street.
US President Donald Trump’s big, beautiful tax bill is weighing on investors’ minds with the Moody’s Ratings downgrade still fresh, and bond yields are continuing to push higher.
Meanwhile, Australian futures are pointing to an upbeat day in the antipodes – following a stronger lead from Europe – with local earnings today from Argosy Property and Napier Port, and Vista Group International hosting shareholders at their annual meeting.
And the New Zealand government shut down the prospect of going it alone in the world of digital services taxes, pulling the legislation yesterday, while commerce minister Scott Simpson also ushered through the first reading of consumer finance law that’s caught some attention by stepping across an existing class action against ANZ Bank New Zealand and ASB Bank.
Questions
Wall Street was relatively subdued with the S&P 500 down 0.8% in late trading with the Magnificent 7 mega-stocks broadly weaker as investors continue to ponder the impact of mounting federal government deficits and shallower interest rate cuts.
The yield on 10-year US Treasuries was up 2 basis points at 4.48%, and the kiwi dollar traded at 59.15 US cents at 7am in Auckland from 59.21 cents yesterday.
“Ongoing US budget negotiations have kept the focus on the fiscal deficit, particularly after the credit rating downgrade by Moody’s Ratings, at the end of last week,” Bank of New Zealand senior interest rate strategist Stuart Ritson said in a note. “Government bond curves have continued to steepen, particularly at the longer end of the yield curve, with a large selloff in Japan after a weak bond auction.”
Alphabet’s Google signalled plans at its annual I/O conference in California to introduce a subscription model for users and roll out an AI mode on its dominant search engine, as it faces increasing competition from AI startups seeking to topple it.
Meanwhile, Tesla eked out a small gain after Elon Musk said he’ll significantly reduce his political spending and that he expects to still be chief executive of the electric vehicle maker five years from now.
Signs of life
Meanwhile, stock markets across the Atlantic were stronger with the UK’s FTSE 100 up 0.9% and Germany’s DAX 30 advancing 0.4%, with analysts growing more optimistic about corporate earnings on the continent.
That’s providing an upbeat lead to the antipodes, with Australian futures pointing to a 0.5% increase for the S&P/ASX 200 index today.
On this side of the Tasman, investors are eyeing up earnings from Argosy Property, Radius Residential Care, PaySauce and Napier Port. NZ Rural Land Co and Vista Group International are also holding their annual meetings today. April merchandise trade figures are also due today.
And milk prices fell at the latest Global Dairy Trade event, with the GDT price index down 0.9% and the average selling price at US$4,589 per tonne.
Busy bees
Meanwhile, with the New Zealand government’s budget in view, revenue minister Simon Watts yesterday discharged the proposed digital services tax, which had been a backstop in case efforts to find a multilateral response to cross-border tax issues stalled.
And commerce minister Scott Simpson ushered consumer finance law through its first reading, with the select committee due to report back in October.
The amendments address rules that unexpectedly captured mortgage lending, but the bill attracted some controversy by proposing more flexible penalties for a class suit currently before the courts.
Reporting by Paul McBeth. Image from Firmbee.com on Unsplash.
