Wall St gives thanks heading into holiday; UK to hike taxes

Stocks on Wall Street gained heading into the Thanksgiving holiday, with Robinhood leading the S&P 500 higher as the trading platform teamed up with Susquehanna International Group to launch a new futures and derivatives exchange.

Meanwhile, stocks across the Atlantic were also stronger, with the UK chancellor of the exchequer Rachel Reeves raising taxes to cover the cost of increased welfare spending and shore up the government’s books while the European Central Bank pointed to stretched valuations in increasingly concentrated asset markets as a key risk to financial stability.

The kiwi dollar held on to yesterday’s gains after the Reserve Bank cut the official cash rate a quarter-point as expected, with a dissenting vote to keep the benchmark unchanged and a slightly higher forecast track seen as narrowing the chance of another reduction in the new year.

And locally, Statistics New Zealand will release September quarter consumer spending data, while retirement village reporting Ryman Healthcare and general insurer Tower are among those reporting.

Turkey time

Stocks on Wall Street rose for a fourth session heading into the Thanksgiving holiday, with the S&P 500 up 0.9% in late trading as expectations remain firm for the Federal Reserve to cut the federal funds rate next month, further quelling investor nerves from earlier this month.

The volatility index, known as Wall Street’s fear gauge, fell 6.7%, while Bitcoin jumped 2.8% to US$89,853 at 7am in Auckland.

Robinhood led the S&P 500 higher, jumping 10% after announcing plans to launch a new futures and derivatives exchange with market maker Susquehanna International. The trading platform will buy MIAXdx from Miami International Holdings, which will keep a 10% stake, to expand its range of prediction contracts.

Nvidia rose 1.6% in late trading, clawing back some of its recent losses as Alphabet’s Google is seen as a growing rival to the chipmaker’s dominance supplying artificial intelligence firms.

Dell Technologies jumped 6.1% after raising its annual earnings guidance and said it expects AI server shipments to double, while HP fell 1.9% after earnings missed expectations and it said it plans to lay off up to 10% of its workforce.

Deere & Co dropped 4.9% said tariffs will continue to squeeze earnings as it delivered a gloomier annual forecast.

Rule Britannia

Stock markets were also stronger across the Atlantic, with the UK’s FTSE 100 index up 0.9%, Germany’s DAX 30 gaining 1.1% and France’s CAC 40 advancing 0.9%.

UK chancellor of the exchequer Rachel Reeves unveiled the British government’s budget, with plans to lift taxes by about £26 billion a year to cover increased welfare spending and shore up the books. The yield on 10-year gilts fell 7 basis points to 4.43%, and the kiwi dollar traded at 43.04 British pence from 43.13 pence yesterday.

“Financial markets responded positively to the UK budget with sterling, the gilts market, and the stock market all rallying,” ANZ Bank New Zealand economists said in a note. “The positive sentiment in the UK was reflected elsewhere as renewed expectations of monetary easing from the Fed and strong US core capital goods orders for September underpinned bullish sentiment.”

Meanwhile, the European Central Bank’s latest financial stability report noted vulnerabilities remain elevated, with a key risk being stretched valuations in increasingly concentrated asset markets. The kiwi was unchanged at 49.10 euro cents from yesterday.

That upbeat sentiment is set to carry through into the antipodes, with Australian futures pointing to a 0.4% gain for the S&P/ASX 200 index when trading opens across the Tasman.

The kiwi dollar held yesterday’s gains, trading at 56.93 US cents at 7am in Auckland from 56.92 cents. The currency was spurred higher by the Reserve Bank’s last policy decision of the year, which delivered the expected quarter-point cut taking the official cash rate to 2.25%, although a dissenting vote and higher forecast track than anticipated indicated it was the last reduction in the current cycle.

Local data today include Statistics New Zealand’s September quarter retail trade survey, and the monthly ANZ business outlook survey.

And among companies reporting today, retirement village operator Ryman Healthcare and general insurer Tower are scheduled to report today.

Reporting by Paul McBeth. Image from Deniz Fuchidzhiev on Unsplash.