US megacaps rally as Trump touches down in China
Sanford and Xero are due to report earnings today.
US tech stocks were back on the rise with the Roundhill Magnificent Seven exchange traded fund on track for its best day in a month as the late inclusion of Nvidia chief Jensen Huang on President Donald Trump’s trip to China stoked optimism that chip-sale restrictions would be raised with President Xi Jinping.
Oil prices eased even as the International Energy Agency warned inventories were shrinking at a record pace, with Trump’s summit with his Chinese counterpart putting the Middle East conflict on the backburner.
Australian futures are pointing to a soft start to the trading day despite the firmer lead from Wall Street, with accounting software firm Xero due to report across the Tasman, while fishing group Sanford’s first-half result on the NZX is expected to show a focus on cutting costs and repaying debt.
And local data today include the Real Estate Institute of New Zealand’s monthly house sales update and Statistics NZ’s travel and migration figures for March.
Tech titans
The Nasdaq Composite rose 1.4% in late trading, with semiconductor and chip stocks bouncing back from the prior day’s stumble after Bank of America analysts had a rosy outlook for the artificial intelligence boom, lifting price targets for Nvidia, Micron Technology and Marvell Technology.
The late inclusion of Nvidia chief executive Jensen Huang on US President Trump’s China mission heightened optimism the leaders of the world’s two biggest economies would discuss chip export restrictions in their two-day summit.
The optimism about the AI boom has provided a tailwind for NZX-listed infrastructure investor Infratil, which counts the CDC data centre firm as its biggest investment. It’s gained 21% so far this month.
“With US technology stocks back in control, the NZX 50 looks set for a firmer start today after another strong lead from Wall Street,” Moomoo market strategy consultant Greg Boland said in a note. “NZX20 futures slipped 0.1% yesterday, but with the Nasdaq up 1.4%, the semiconductor index up 3%, and volatility finally back below 18, risk appetite appears to be improving heading into today’s local session.”
The S&P 500 was up 0.7% in late trading, while the blue-chip Dow Jones Industrial Average was more muted, down 0.1%, with software giant Salesforce, Home Depot and International Business Machines at the bottom of the leaderboard.
European stock markets were also stronger, with the UK’s FTSE 100 up 0.6%, while Germany’s DAX gained 0.8% and France’s CAC 40 advanced 0.4%.
Bubbling away
Brent crude oil futures fell 2.1% to US$105.49 a barrel as tensions between the US and Iran remain elevated, with the Middle East conflict expected to be discussed between presidents Trump and Xi. The Polymarket prediction market was pricing a 14% chance of a permanent peace being negotiated by the end of this month, and 34% by the end of June.
The kiwi dollar was little changed at 59.35 US cents at 7am in Auckland from 59.40 cents yesterday as Kevin Warsh was confirmed as chair of the Federal Reserve in a divided vote in the US Senate.
Bond traders have priced in a minimal chance of a rate by the Fed at next month’s review, with US inflation picking up pace last month. Meanwhile, the Reserve Bank of New Zealand’s quarterly survey of expectations yesterday showed managers saw a short-term spike in inflation, but were more sanguine over the medium term.
Australian futures are pointing to a 0.5% decline for the S&P/ASX 200 index when trading opens across the Tasman after the major banks were routed on Wednesday as the federal government’s property tax changes cooled investors’ appetite for the mortgage market.
The kiwi fell to 81.77 Australian cents at 7am from 82.09 cents yesterday.
Meanwhile, REINZ house price data is due today in what’s been a moribund property market for some time. Retirement village operators Ryman Healthcare and Summerset Group Holdings are often tied to the ebbs and flows of the housing market.
Stats NZ travel and migration figures are also due today.
Sanford is due to report its first-half result, with Forsyth Barr analysts forecasting a decline in earnings as growth in the fishing group’s wildcatch segment are offset by soft performances in salmon and mussels businesses.
