The week has started to the European Union and US President Donald Trump finding common ground to smooth the sharp edges of the White House’s proposed tariff regime, with the continent facing a 15% levy on goods crossing the Atlantic.
Wall Street remained in heady territory at the end of last week, with Amazon, Apple, Meta Platforms and Microsoft poised to report their June quarter earnings this week in a reporting season that’s throwing up mixed results.
The US Federal Reserve is also reviewing policy settings this week, with investors predicting no change from chair Jerome Powell and his fellow central bankers.
And domestically, Mainfreight and Ryman Healthcare are holding their annual meetings this week, while construction minister Chris Penk announced plans to make it easier to import building materials to help alleviate the cost of house construction.
Wheeling and dealing
Traders had a muted response to US President Donald Trump’s tariff deal with the European Union as the New Zealand market awoke, with the kiwi dollar trading at 60.27 US cents at 7.30am from 60.14 cents at 7am and 60.20 cents last week. The New Zealand dollar traded at 51.19 euro cents at 7.30am from 51.28 cents last week.
Trump announced the deal with EU president Ursula von der Leyen on Sunday during his trip to Scotland, with European goods facing a 15% rate – half the 30% threatened – ahead of the Aug 1 imposition of the US regime.
Stock markets were mixed on Friday as investors pondered the upcoming tariff regime, with the UK’s FTSE 100 slipping 0.2% on Friday and Germany’s DAX 30 declining 0.3%, while Wall Street’s S&P 500 rose 0.4%.
“US equities ended last week on a positive note with the S&P hitting fresh all-time highs set against the backdrop of a solid earnings season and hopes for further trade deals as the August 1 deadlines looms,” Bank of New Zealand senior interest rate strategist Stuart Ritson said in a note.
China is expected to get another three-month reprieve on the tariff regime to allow negotiations to continued, according to a report in the South China Morning Post.
Deep reading
US corporate earnings season continues, with four of the Magnificent 7 megastocks reporting this week when Amazon, Apple, Meta and Microsoft update the market. Electric vehicle maker Tesla reported a slump in sales last week, while Google-parent Alphabet’s cloud business was driven by artificial intelligence applications, where it’s continuing to ramp up its investment.
About 34% of the S&P 500 companies have reported so far, of which 80% have beaten analysts’ expectations, according to FactSet data. In saying that, earnings growth is poised for its smallest gain since the start of 2024.
The US Federal Reserve is expected to keep the federal funds rate in a range of 4.25% and 4.5% at this week’s policy review, with chair Jerome Powell under increasing pressure from the White House to cut the key rate.
Other central banks meeting this week include Canada, Japan, Brazil, Singapore and South Africa.
In the antipodes, Australian figures are pointing to a 0.1% decline when the S&P/ASX 200 index opens today.
Local data today include filled jobs for June.
On the radar this week are annual meetings for Ryman and Mainfreight on Wednesday, while Green Cross Health’s AGM is on Thursday and AFT Pharmaceuticals on Friday.
On Sunday, New Zealand’s construction minister Chris Penk announced changes to make it easier for builders to use overseas materials in a bid to bring down the cost of house-building.
Reporting by Paul McBeth. Image from Jakob Owens on Unsplash.