US markets were mixed overnight as recession talks began to proliferate back through the market,
with the S&P down 0.3 per cent, the Dow Jones Industrial Average up 0.3 per cent and the Nasdaq Composite falling 1.1 per cent.
Macroeconomic data out overnight was softer than expected, with US private jobs coming in at +145,000, missing market estimates of +210,000.
The US services and composite purchasing managers’ indices were also lower than market expectations.
Treasury yields continued to fall as the market took in the updated news, with the US 10-year reaching a new year-to-date low of 3.29 per cent.
In equities, the market rotated back toward defensive, non-cyclical sectors throughout the trading session, reflecting the strengthened recessionary views.
The best performing sectors in the S&P 500 were utilities (+2.4 per cent) and healthcare (+1.8 per cent), while the worst performing sectors were consumer cyclicals (-1.9 per cent), tech (-1.5 per cent) and industrials (-1.5 per cent).
Oil prices also seemed to have steadied following a rally earlier in the week, with the WTI broadly unchanged at US$80.68.
Australia
Hot off this week’s rate decision, Reserve Bank of Australia governor Philip Lowe has issued a statement on the housing market – warning that not enough homes are being built to house the influx of migrants.
Lowe predicted that rents will continue to rise and put an upward pressure on inflation, despite an already heated housing market in major Australian cities.
Melbourne-based luxury skincare company Aesop has been sold to cosmetics giant L’Oreal, in a record US$2.5 billion deal.
Aesop has been sold by its current Brazilian owner Natura & Co, which bought the company in 2012 and will look to use the sale proceeds to deleverage its balance sheet and focus on its other businesses.
New Zealand
The Reserve Bank of New Zealand shocked financial markets by announcing a 50 basis point hike yesterday, bringing the official cash rate up to 5.25 per cent.
The NZX 50 responded in kind, finishing down 0.3 per cent for the day.
In its monetary policy statement, the central bank pointed to the continuing need to battle inflation until it is back to a range of 1 to 3 per cent, and the fact that recent adverse weather effects in the country may prove to be inflationary.
The vast majority of the market, as well as interest rate futures, had expected a 25 basis point hike.
The larger than expected hike was especially surprising given the decision from the Reserve Bank of Australia to pause its rate hikes the day prior.
In other news, Spark released details of its three year strategy, which will focus on data centres and new technologies to fuel growth.
Notable highlights included a $250 to $300 million investment into data centres over the next three years, a $40 to $60 million investment into 5G Standalone technology and also further investment into Spark’s newer technology platforms such as Internet of Things and AI.
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