The latest US presidential blink revved up a global rally in stock markets as US and European investors welcomed Donald Trump's soothing words that he never planned to tell Federal Reserve chair Jerome Powell he’s fired.
And reports in the Wall Street Journal that the White House is considering slashing the punitive tariffs on China elicited an additional sigh of relief as the chilly relationship between the US and China appears to be thawing, especially after Hapag-Lloyd’s customers axed almost a third of their shipments from China to the US.
Meanwhile, Tesla surged as its mercurial chief Elon Musk said he’ll spend a lot more time on the electric vehicle maker next month, while Germany’s SAP jumped after beating earnings expectations and reassuring investors it can navigate the choppy tariff waters.
And the pause in the ‘Sell America’ gave Bitcoin a new lease of life with the cryptocurrency back on the rise, while whipping the wind out of the sails of a surging gold price.
Don't look back in anger
“Markets have been whippy in response to headlines on tariffs but the net result is stronger global equity markets and small net movement in US Treasuries with a curve flattening bias,” Bank of New Zealand senior markets strategist Jason Wong said in a note. Trump’s comments “looked like a walk-back from his angry tone towards Powell just before the Easter break and after the market spat the dummy earlier this week”.
Stocks on Wall Street carried on the rally that started in Asia, with the Nasdaq Composite up 2.9% and the S&P 500 advancing 1.8%, with the Magnificent 7 mega-stocks back on the rise.
Tesla climbed 6.2% having reported a weaker than expected result after the bell yesterday, but getting more time from Musk who said he’s done the heavy lifting at the Department of Government Efficiency.
Google-parent Alphabet was up 2.2%, while Apple and Meta Platforms shrugged off European fines over alleged breaches of the bloc’s digital regulatory regime, with both tech giants stronger on the day.
Bitcoin continued its recovery, up 2.3% at US$93,672 at 7am in Auckland, following the revival in investor sentiment, although gold futures – which have notched new records in the heightened uncertainty – fell 3.6% to US$3,297 an ounce.
Stocks in Europe were also stronger as Germany’s DAX 30 climbed 3.1%, with software firm SAP surging 16% after beating analysts’ earnings expectations, saying it hasn’t seen any pullback in investment intentions as a result of the tariff regime.
Stronger
Adidas gained 6.2% after beating investors’ forecasts as it bounces back from its ill-fated collaboration with rapper Ye for the Yeezy sneaker.
And Hapag-Lloyd said its customers have cancelled 30% of shipments from China to the US over fears about the trade conflict between the world's two biggest economies, although there's been a sharp rise in consignments from Vietnam, Cambodia and Thailand.
Meanwhile, UK currency risk management firm Argentex appears to be the first casualty of whipsawing foreign exchange markets, with the firm saying its liquidity was rocked by margin calls. It’s in talks with IFX Payments about a possible offer and emergency funding line.
The New Zealand dollar fell to 59.56 US cents at 7am in Auckland from 59.79 cents yesterday, and traded at 93.56 Australian cents from 93.49 cents.
Australian futures are pointing to a 0.1% decline for the S&P/ASX 200 index.
Local data today includes ANZ’s consumer confidence survey.
Reporting by Paul McBeth. Image from Doug Nealy on Unsplash.
This story has been corrected to remove the reference foreshadowing Alphabet's upcoming result, which was a day later.
