Wall Street mixed as US jobs growth misses expectations
OpenAI said to be in talks with US govt over 5% stake.
Stocks on Wall Street were mixed after US jobs growth was slower than economists predicted, dialling back expectations for the Federal Reserve to hike its benchmark interest rate, spurring gains for the kiwi dollar.
The Dow Jones Industrial Average rallied into the long weekend, with investors cooling on semiconductor stocks such as Nvidia and Micron Technology behind the artificial intelligence trade, with the likes of Apple, McDonald’s and Johnson & Johnson among the beneficiaries.
OpenAI is reportedly in talks with the US federal government over the White House taking a 5% stake in the ChatGPT developer, while Anthropic is said to be in talks with Samsung Electronics to develop a custom AI chip for the Claude developer.
And locally, ANZ’s consumer confidence report is the major data on the calendar as economists remain divided on whether the Reserve Bank will start raising interest rates next week.
Employing judgement
The kiwi dollar rose to 56.97 US cents at 7am in Auckland from 56.74 cents yesterday against a broadly weaker greenback as bond traders pared their expectations for the Fed to hike the federal funds rate after Bureau of Labor Statistics showed the US added 57,000 jobs last month, less than the 115,000 predicted.
“Treasuries rallied after the weaker-than-expected jobs report as markets pared expectations for Fed tightening,” Bank of New Zealand senior interest rate strategist Stuart Ritson said in a note. “There is around 30 basis points of tightening now priced by year-end, down from 37 basis points ahead of the data.”
Wall Street was mixed on the news, with companies fuelling the AI trade among those on the red side of the ledger, with the tech-heavy Nasdaq Composite sliding 1.2%, while the blue-chip Dow advanced 0.7%. The S&P 500 dropped 0.4%.
The AI trade cooled in Asia yesterday, with South Korea’s Kospi slumping 7.9%.
Tesla unwound earlier gains this week as it sank 8% after the electric vehicle maker beat expectations with record quarterly deliveries in Europe, while tokenisation firm Securitize was up 4.9% in late trading in its debut on the New York Stock Exchange.
Bitcoin rose 2.9% to US$61,698 and Strategy advanced 7.9% after JPMorgan Chase analysts warned the crypto treasury firm’s shift to selling Bitcoin added a new risk to crypto investors.
European markets rallied on the soft US jobs data, with the UK’s FTSE 100 gaining 1.7%, Germany’s DAX climbing 2.2% and France’s CAC 40 advancing 1.7%.
Artificial moves
In AI news, the Financial Times reported that OpenAI was in preliminary talks with the White House about the government taking a 5% stake in the ChatGPT maker, removing political barriers that had seen restrictions placed on the release of some large language models. Meanwhile, The Information reported Anthropic was discussing a partnership with Samsung to build a custom AI chip.
Brent crude oil futures were up 0.8% at US$71.70 a barrel as the US and Iran resumed negotiations for a lasting ceasefire, with the Islamic Republic insisting on being able to charge tolls for ships to pass through the Strait of Hormuz.
Meanwhile, Russia bombarded Ukraine’s capital Kyiv, reportedly killing at least 21 people, and prompting the European Union to propose a new round of sanctions on entities supporting Moscow’s military industry.
Denmark’s central bank intervened in foreign exchange markets to prop up the krone to defend its peg to the euro after the currency hit a 25-year low. Currency traders are also on alert for intervention by Japan’s government with the yen near 40-year lows against the greenback.
Australian futures are pointing to a 0.3% gain for the S&P/ASX 200 index when trading opens across the Tasman, and Moomoo market strategy consultant Greg Boland said he expected a cautious start to the day for New Zealand’s NZX.
“With US markets closed on Friday, investors are likely to spend the remainder of the week assessing whether the weaker employment data signals a slowing economy or simply reduces pressure on the Federal Reserve to tighten monetary policy further, while New Zealand investors will continue looking ahead to next week's Reserve Bank policy decision,” he said in a note.
Local data today include ANZ’s monthly consumer confidence survey, following a more upbeat business sentiment survey earlier in the week.
