Wall St nudges higher as investors eye inflation, jobs data

Stock markets on Wall Street were generally stronger as investor sentiment continued to recover from last week’s tech jitters, with the likes of Nvidia, Microsoft and Salesforce back on the green side of the ledger ahead of US jobs and inflation figures providing the next clue on where the Federal Reserve will take interest rates.

Grocery chain Kroger was among the day’s gainers after the company tapped former Air New Zealand and Walmart US chief Greg Foran to oversee expansion plans.

The greenback was under pressure as a report by Bloomberg that the People’s Bank of China and National Financial Regulatory Administration have urged Chinese financial institutions to pare back their holdings of US Treasuries weighed on the world’s reserve currency, with the kiwi and Aussie dollars among the beneficiaries.

The upbeat mood has Australian futures pointing to a positive start to the trading day for the ASX, with Computershare and Macquarie due to report earnings today, while New Zealand has one eye on the domestic earnings season picking up the pace next week, with ANZ’s truckometer survey the only data of note.

Holding pattern

Stocks on Wall Street were broadly stronger in late trading on Monday, with the tech-heavy Nasdaq Composite leading the charge – up 0.9% – as the likes of Nvidia, Microsoft and Salesforce bounced back from last week’s decline when Anthropic’s latest artificial intelligence plug-in for legal users prompted investors to ponder the impact on software-as-a-service firms.

The S&P 500 was up 0.5% in late trading, while the Dow Jones Industrial Average dipped 0.1%, with pharmaceutical firms Merck & Co and Amgen at the bottom of the blue-chip index’s leaderboard.

Denmark’s Novo Nordisk climbed 5.3% after Hims & Hers said it will stop selling a copycat version of the European firm’s weight-loss drug, after Novo filed a lawsuit against the telehealth firm. Separately, the Food and Drug Administration said it plans to restrict the use of GLP-1 ingredients in popular treatments, citing Hims & Hers in its statement. The telehealth firm’s shares sank 19% in late trading.

Grocery chain Kroger gained 4.6% in late trading after hiring former Air New Zealand chief Greg Foran – who also headed Walmart US – as its new chief executive, starting immediately. Kroger has been without a boss since longtime chief Rodney McMullen departed almost a year earlier over an undisclosed ethics violation. Walmart was down 2% in late trading.

Stock markets were broadly stronger across the Atlantic, with the UK’s FTSE 100 up 0.2%, while Germany’s DAX 30 jumped 1.2% and France’s CAC 40 gained 0.6%.

Bank on it

German and French banks were among the day’s gainers after Italy’s UniCredit reported better-than-expected earnings, while the UK’s NatWest – which is due to report later this week – declined after agreeing to buy wealth manager Evelyn Partners for £2.7 billion.

Investors are waiting for the delayed US non-farm payrolls figures, inflation data and retail sales due this week for the next insight into what the Federal Reserve’s next move will be on interest rates. Bond traders have two rate cuts fully priced in by the September meeting.

The kiwi dollar rose to 60.50 US cents at 7am in Auckland from 60.14 cents yesterday against a broadly weaker greenback after Bloomberg reported Chinese regulators are urging financial institutions to dial back their holdings of US Treasuries. The yield on the US 10-year Treasury fell 2 basis points to 4.21%.

“The report has had more impact on sentiment for the US dollar than Treasuries, given Chinese holdings of Treasuries are much smaller than they used to be,” Bank of New Zealand senior markets strategist Jason Wong said in a note. “It is a bit of a non-story as investors around the world are implementing strategies to reduce exposure to the US and US dollar and China is likely no different.”

Australian futures are pointing to a 0.3% gain for the resources-heavy S&P/ASX 200 index when trading opens across the Tasman, with gold prices back above US$5,000 an ounce. Gold futures were up 1.9% at US$5,076 an ounce at 7am in Auckland.

Companies reporting earnings in Australia today include registry service Computershare and bank Macquarie, while ANZ’s truckometer gauge of freight activity is the only data of note on this side of the Tasman.

Reporting by Paul McBeth. Image from Markus Winkler on Unsplash.