Walmart leads Wall St lower as tariffs costs weigh; Fed’s Powell looms
Sky TV and NZX next up in earnings season.
Stocks on Wall Street extended their slide lower, with Walmart leading the Dow Jones Industrial Average lower as investors fretted about the mounting tariff-driven costs for the big box retailer.
Meanwhile, US Federal Reserve chair Jerome Powell’s upcoming speech at the central bank’s annual symposium in Jackson Hole, Wyoming is keenly awaited for any clues on whether the federal funds rate will resume its downward path.
Locally, earnings season continues in earnest with stock market operator NZX and pay-TV operator Sky Network Television the majors in the diary, while South Port New Zealand and Michael Hill International are also scheduled to report.
And high-tech components maker Rakon is holding its annual meeting where founding family member Brent Robinson is seeking to gain control of the board after being passed over for the chair.
Never forget
Stocks on Wall Street fell, with the S&P 500 poised for its fifth decline, as retailers weighed on the Dow Jones Industrial Average after Walmart reported sales growth and raised its outlook, but fell short of earnings expectations and lifted prices on about 10% of the goods it imports due to the White House’s tariff regime.
Across the Atlantic, stock markets in Europe were mixed with the UK’s FTSE 100 index up 0.2% and Germany’s DAX 30 rising 0.1%, while France’s CAC 40 slipped 0.4%.
“While earlier in the week falls in big tech led the move lower and there was evidence of some sector rotation, today’s fall is more broadly based,” Bank of New Zealand senior markets strategist Jason Wong said in a note.
The upcoming keynote speech by Federal Reserve chair Jerome Powell at the annual central bankers’ symposium has been keenly awaited for any clues on the track of interest rates.
“Some nerves have developed as the focus turns to the annual Jackson Hole Symposium, where Fed chair Powell will be speaking overnight, NZ time,” BNZ’s Wong said. “Conviction in a Fed policy pivot has been fading over the past week, with the market now only pricing in 18 basis points of cuts for the September meeting, compared to a fully priced cut just over a week ago, and less than two full rate cuts are now priced for this year.”
Home injection
New Zealand’s Reserve Bank gave the NZX a jolt earlier this week when it cut the official cash rate to 3% as expected, and signalled steeper and earlier cuts were on the cards.
The kiwi dollar traded at 58.19 US cents at 7am in Auckland from 58.18 cents yesterday.
Australian futures are pointing to a 0.1% decline for the S&P/ASX 200 index, which climbed above 9,000 for the first time on Thursday. The NZX50 crossed into positive territory in the year-to-date yesterday.
Domestically, earnings season continues with NZX and Sky TV scheduled to report, with the stock market operator expected to deliver a solid result from a soft prior period, while the pay-TV operator will be watched for more details on the Discovery NZ – the old TV3 – acquisition and any movement on a rugby rights deal.
South Port and Michael Hill are also scheduled to report.
Rakon holds its annual meeting in Auckland today, where shareholders will decide whether to support or oppose founding family member Brent Robinson’s attempt to overhaul the board.
Robinson has the backing of fellow substantial shareholders Siward Crystal Technology and Mike Daniel, although the manufacturer’s independent director-dominated board made a new appointment yesterday and chair Lorraine Witten has decided to stay on the board to make sure the company doesn’t breach NZX listing rules.
No major local data are scheduled for today.
