Stocks on Wall Street are poised for double-digit gains in the June quarter as investor confidence bounced back from US President Donald Trump’s tariff campaign at the start of April and survived the oil price shock through the bombing of Iran.
Trump’s July 9 deadline to cut trade deals is looming, with French President Emmanuel Macron calling the tariffs a form of blackmail amid reports the European Union is open to a trans-Atlantic agreement with the White House.
Meanwhile, Canada’s backdown on imposing a digital services tax – an initiative that prompted Trump to quit trade talks with the US neighbour – buoyed Wall Street heading into the final day of the quarter, with Meta Platforms and Microsoft nudging higher.
And major US banks including JPMorgan Chase, Bank of America and Wells Fargo advanced after the Federal Reserve’s latest stress found the biggest lenders are well-positioned to withstand a downturn.
Northern summer
The S&P 500 is heading for a 10% gain and the Nasdaq 17% as the June quarter heads into its final bell in a volatile period that started with US President Donald Trump’s Liberation Day tariff regime upending the global trade order and included the whipsawing of oil prices amid heightened tensions between Iran and Israel that ended with the US bombing of Iranian nuclear sites.
The US pushed out its initial deadline for imposing import levies on its trading partners, with the extension to July 9 looming as various nations seek to negotiate a deal with the world’s biggest economy.
Canada backed down on imposing a digital services tax on major tech companies after Trump abruptly ended talks with his neighbour, buoying Meta Platforms and Microsoft in trading on Monday.
Meanwhile, the European Union’s top negotiator is heading to the US to secure a deal, with the bloc of nations reportedly softening on its initial stance, even as French President Emmanuel Macron called the tariffs a form of blackmail, rather than tools to rebalance trading relationships.
“US equities are ending the month on a positive footing with the S&P trading to a fresh intra-day record high,” Bank of New Zealand senior interest rate strategist Stuart Ritson said in a note. “Investor sentiment has been underpinned by signs of progress on trade negotiations and the prospect of easier policy monetary policy from the Federal Reserve.”
Bank on it
The S&P 500 was up 0.3% in late trading, with shares of major US banks among the leaders after the Fed’s stress test found lenders had enough capital to absorb more than US$550 billion of losses, having flagged looser capital requirements last week. JPMorgan, Wells Fargo, Bank of America and Goldman Sachs were all on the green side of the ledger.
Stock markets in Europe were broadly weaker, although they largely notched up gains for the June quarter.
Australian futures are pointing to a flat start to July for the S&P/ASX 200 index, while the kiwi dollar climbed to 60.94 US cents at 7am in Auckland from 60.74 cents yesterday.
Local data today include the New Zealand Institute of Economic Research’s quarterly survey of business opinion, following ANZ’s monthly gauge on Monday showing an improvement in firms’ expectations about the economy and their own activity.
Statistics New Zealand is also due to release building permits for May, while Kiwi Property Group is holding its annual meeting in Auckland today.
And The Australian’s DataRoom column is reporting Infratil’s RetireAustralia investment is attracting suitors once more, with the infrastructure investor unsuccessful in finding a buyer last year.
Reporting by Paul McBeth. Image from Maurice Gort on Unsplash.
