US tech stocks carry on Asia’s ebullience as Wall St gains
S&P cuts France’s credit rating.
Wall Street started the week on a stronger footing with tech stocks shrugging off a major outage by Amazon Web Services, with the likes of Super Micro Computer, Salesforce and Apple leading gainers as rallies in Hong Kong and Japan carried on into the Northern Hemisphere.
US President Donald Trump’s optimism about meeting his Chinese counterpart Xi Jinping helped settle investors who’d been unnerved by the superpowers jostling over access to rare earths materials, while Australian prime minister Anthony Albanese signed an A$8.5 billion critical minerals deal during his meeting in the Oval Office.
Meanwhile, S&P Global Ratings cut France’s credit rating over the European nation’s political instability, which most recently showed up in the revolving door for prime minister Sebastien Lecornu.
And domestically, New Zealand’s annual meeting season picks up pace with Meridian Energy and Property for Industry holding gatherings today, with investors looking for clues on whether the country’s biggest companies are starting to see signs of life in the economy.
Calmer heads
Stocks on both sides of the Atlantic started the week stronger, with Wall Street’s S&P 500 up 1.2% in late trading and the tech-heavy Nasdaq Composite advancing 1.5%, while the UK’s FTSE 100 increased 0.5% and Germany’s DAX 30 gained 1.8%.
That carried on the upbeat sentiment in the Asian trading session when Japan’s Nikkei 225 hit a record as Liberal Democratic Party leader Sanae Takaichi secured enough parliamentary support to win the prime ministership, while Hong Kong’s Hang Seng surged after Chinese data showed growth for the world’s second-biggest economy didn’t slow as much as analysts estimated.
Supermicro led the S&P500 higher and Salesforce and Apple topped the Dow Jones Industrial Average with tech stocks broadly stronger as Wall Street’s fear gauge – the CBOE volatility index – fell 11%.
“Newsflow has been light but the mood in equity markets have been positive, with investors shaking off the temporary bout of pessimism that pervaded late last week,” Bank of New Zealand senior markets strategist Jason Wong said in a note.
Tech stocks shrugged off a major outage for AWS, which knocked out websites and disrupted services for more than an hour. Amazon was up 1.3% in late trading.
US corporate earnings picks up steam this week, with 90 companies on the S&P500 due to report this week.
Meeting of the minds
US President Donald Trump’s softer rhetoric about China and his optimism of meeting Xi Jinping helped keep those nerves in check, although perennial safe-haven gold resumed its rally, with futures prices for the precious metal up 3.6% at US$4,364 an ounce.
A key source of tension between the superpowers has been access to critical materials used in computer chips and other hi-tech products, and the US has been seeking alternative sources of supply. The latest deal was with Australia, with prime minister Anthony Albanese signing an A$8.5 billion agreement to increase US access to critical minerals.
Across the Atlantic, France’s woes continued with S&P cutting its credit rating for the nation one notch to A-plus from AA-minus over the political instability plaguing the European nation, which is stifling President Emmanuel Macron’s plans to shore up the sovereign’s books. The CAC 40 rose 0.4%.
The kiwi dollar rose to 49.36 euro cents at 7am in Auckland from 49.17 cents yesterday.
That upbeat sentiment is set to carry through to the antipodes, with Australian futures pointing to a 0.5% gain when trading opens across the Tasman, while the kiwi dollar traded at 57.46 US cents from 57.37 cents yesterday.
Local data today include Statistics New Zealand’s merchandise trade figures for September, while the latest Seek NZ employment report showed the volume of job ads increased 1% last month and were up 6% from a year earlier.
The local annual meeting season kicks up a notch this week with PFI and Meridian Energy shareholders gathering today to get an update on their respective companies and to vote on the usual resolutions.
Investors will be watching for early signs of life in the economy, particularly from the likes of Fletcher Building and Steel & Tube when they hold their meetings later in the week.
And Viridian has withdrawn its application to the Commerce Commission to takeover Metro Performance Glass.
