A strong housing market added to the uncertain inflationary outlook as US markets saw the major benchmarks stay relatively flat. Both Europe and Australia saw positive movement as company earnings sentiment appeared strong, while our friends across the ditch at the Reserve Bank of Australia kept its policy rate on hold.
Major US indices saw very little movement as major benchmarks struggled to move either side of zero. The DOW was flat, the S&P 500 +0.1%, and the NASDAQ fell -0.1%. Market sentiment aligns with a need for the Federal Reserve to potentially hold the benchmark rate for an extended period as a persistently strong housing market continues to defy traditional notions about rising rates. In equities, Walt Disney fell -9.5%, its largest drop in nearly 18 months, as weaker TV business and box office performance saw profits drop. Nvidia also dropped -2.2% after news circulated that major customer Apple (+0.4%) is beginning to develop in-house chips to support its artificial intelligence software. Tesla fell -3.6% after China-made EV sales dropped in April. In bonds, the US 2-year treasury bond yield remained unchanged at 4.83% while the 10-year yield dipped -3 bps to 4.46%.
European markets saw positive activity as both the STOXX 600 (+1.1%) and the FTSE 100 (+1.2%) jumped. UniCredit SpA, Italy’s second-largest lender, jumped +3.5% after smashing both revenue and net profit expectations with Q1 results. In the Swiss market, UBS added a major +8.0% after profit was reported following two consecutive quarters of loss. Software giant and Manchester United kit sponsor TeamViewer dropped -8.1% after failing to hit analyst earnings forecasts.
Across Asia, Japan’s Nikkei 225 jumped +1.6%, along with Korea’s Kospi index (+2.2%), whilst Hong Kong’s Hang Seng dropped -0.5%. China remained largely unchanged as the Shanghai Composite inched up +0.2% and the CSI 300 was unchanged. In Australia the ASX 200 gained +1.4%. Most notably, the Reserve Bank of Australia left the OCR unchanged as inflationary pressures ease at a slower than preferred pace. Equity movement was dominated in the financial sector, with the big banks throwing their weight around. Westpac leapt +2.8% following positive results, while Macquarie and Commonwealth Bank added +2.5% and +2.1% respectively. ANZ remained nudged ahead at +0.1% despite unveiling a major buyback plan within its FH24 results. Due to trading ex-dividend, National Australia Bank dropped -1.5% as the only major bank to fall over the day. In New Zealand, the NZX 50 dipped -0.2%.
Oil prices remained unchanged, while Gold dropped -0.4% and Iron Ore gained +0.7%.
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This morning summary has been provided by Forsyth Barr Ltd and is for general information purposes only - your financial situation or goals have not been taken into account. If you would like more information or advice that is specific to you, talk to your financial adviser.