Investors likely cheered as lockdowns ease here and abroad

The Dow Jones Industrial Average was up 1.6 per cent this morning NZ time

The New Zealand market may get a boost as the covid-19 level 4 lockdown ends and as efforts to reopen other economies gather momentum.

Today marks the first day under reduced restrictions for New Zealand. Some 400,000 people have returned to work in sectors like construction and according to Radio New Zealand, there were long queues outside takeaway places early this morning.

The looser restrictions could benefit retailers like The Warehouse Group and Briscoe Group – which are now able to expand what they can offer under strict contact-less conditions – as well as companies like fast food operator Restaurant Brands. Investors may also be more upbeat on Fletcher Building, as construction resumes.

The New Zealand market was closed on Monday and may also benefit as it catches up after a positive day in Australia and other Asian markets.

In the US, Wall Street advanced as some states eased shutdown restrictions. Tesla jumped 9.2 percent after the company called some workers back to its California vehicle assembly plant next week, Reuters reported.

Meanwhile, investors are also looking ahead to results this week from companies like Alphabet, Boeing Co, Facebook, Apple and Amazon.

Analysts expect first-quarter S&P 500 earnings to have dropped by 15 percent from last year, a dramatic reversal from the 6.3 percent year-on-year growth forecast at the start of the year, according to Refinitiv data.

The Dow Jones Industrial Average was up 1.6 percent at 8am (NZ time), while the Nasdaq was up 1.1 percent and the S&P 500 was up 1.6 percent.

Domestically, investors may also be cheered after international credit ratings agency Moody's reaffirmed its Aaa rating on New Zealand's economy - and noted the Treasury has a "strong record" of managing shocks through effective fiscal policy, while demonstrating fiscal discipline over the long term.

The kiwi was trading at 60.53 US cents at 8am in Wellington, from 59.91 cents here late Friday.

"We expect such discipline to persist, despite substantial economic and fiscal stimulus measures announced in response to the coronavirus outbreak," Moody's said.

It also noted "New Zealand retains ample fiscal flexibility to respond to both long-term spending needs related to social demands, or a potential sudden rise in expenditure to support the economy in a downturn."

"New Zealand's low government debt compared to the rest of the world puts us in a strong position to invest in the economy to create jobs and lift incomes as we recover from the impact of covid-19," Finance Minister Grant Robertson said in the wake of the Moody's report.

Looking ahead, the focus this week will be on the US Federal Reserve's meeting Tuesday and Wednesday in the US and any guidance from the central bank's chair Jerome Powell.

"No further developments on QE or interest rates are expected, but we expect Powell to stress that the Fed is not out of ammunition," said ANZ Bank chief economist Sharon Zollner.