Apparel makers including Nike rallied as stocks on Wall Street advanced after US President Donald Trump cut a trade deal with Vietnam ahead of the looming deadline for nations to barter down prospective tariffs from the world’s biggest economy.
Tech-stocks were broadly stronger, with Tesla bouncing back from yesterday’s decline during the resumption of Elon Musk and Trump’s stoush over the big and beautiful tax and spending bill, while healthcare companies sank after managed care services firm Centene Corp pulled its earnings guidance.
The British pound sank, bond yields rose and stocks in London declined after the UK government’s backdown on welfare reform revived fears about prime minister Kier Starmer’s management of the nation’s finances.
Meanwhile, Australian media is reporting Westpac Banking Corp’s new chief is reviewing the lender’s non-core assets, with the $11.72 billion New Zealand KiwiSaver scheme said to be in the spotlight.
Deal time
Stocks on Wall Street gained with the S&P 500 up 0.4% in late trading and the tech-heavy Nasdaq Composite rising 0.8% after US President Donald Trump’s administration reached a trade deal with Vietnam more than halving its proposed tariff rate to 20%, while jobs figures showed an unexpected decline in private payrolls ahead of the non-farm payrolls report on Thursday.
Apparel makers were broadly stronger, with Nike up 4.2% on news of the Vietnam trade deal. The South East Asian nation is the eighth biggest trading partner for the US, with two-way trade of US$150 billion, and the third-largest trade deficit of US$123 billion.
“The S&P remained well underpinned and recorded a new record high after President Trump announced a trade deal with Vietnam,” Bank of New Zealand senior interest rate strategist Stuart Ritson said in a note. “Separately, President Trump has ramped up pressure on Japan and cast doubt that the US would reach a deal.”
Tesla shrugged off news of a 14% decline in quarterly sales as it clawed back earlier losses when chief executive Elon Musk renewed his criticism of Trump’s tax and spending legislation, which passed through the Senate this week.
Ill health
Meanwhile, healthcare stocks were broadly weaker with Centene slumping almost 40% after it withdrew its earnings guidance. UnitedHealth Group was down 5.5% in late trading.
Cryptocurrency Ripple rose 3.6% to US$2.25 after the crypto firm applied for a national US banking licence. Bitcoin was up 4% at US$109,607.
Across the Atlantic, the UK's FTSE 100 declined 0.1%, while the yield on 10-year gilts climbed 16 basis points to 4.62% and the pound was broadly weaker after the British government’s backdown on welfare reform raised fears about the Labour administration’s handling of the nation’s finances, and prompted speculation over the future of chancellor Rachel Reeves.
The kiwi dollar rose to 44.65 British pence at 7am in Auckland from 44.39 pence yesterday.
Australian futures are pointing to a 0.3% decline when the S&P/ASX 200 index opens today, while the kiwi dollar traded at 60.87 US cents from 61.01 cents yesterday.
There’s no local data scheduled for today, while the New Zealand government’s accounts for the 11 months through May are due and Chinese services activity figures will be watched by local exporters for a gauge of the nation’s biggest trading partner.
And the Australian Financial Review’s Street Talk column reported Westpac’s new chief executive is reviewing non-core assets and is considering the future of the New Zealand KiwiSaver scheme, managed by BT Funds. The KiwiSaver scheme was New Zealand’s fourth biggest at the end of March, with $11.72 billion under management and estimated to generate $54.3 million of annual fees by Morningstar.
Reporting by Paul McBeth. Image from Joseph Barrientos on Unsplash.
This has been updated to correct the upcoming Chinese data.