Rocket Lab Surges Over 30% to Record High Amid Renewed Space Exploration Optimism
The New Zealand sharemarket posted a small loss as inflation remained under control, prompting renewed calls for a big interest rate cut next month.
Wednesday, January 22nd 2025, 6:32PM
by BusinessDesk
The S&P/NZX 50 Index had a late dip and closed at 13,019.83, down 15.76 points or 0.12%. There were 22.4 million share transactions worth $94.14m.
The December quarter Consumers Price Index showed inflation was running at 2.2% – the second consecutive quarter that annual inflation has been within the Reserve Bank of NZ’s (RBNZ) target of 1-3%.
It was slightly higher than the RBNZ's 2.1% forecast.
'Worst recession'
Greg Smith, head of retail with Devon Funds Management, said the inflation numbers are at the point where they put the acid on the RBNZ to do more with interest rate cuts.
“We are in the worst recession for 30 years, even outstripping the Global Financial Crisis which didn’t have inflation. The official cash rate is 4.25%, and the neutral rate, neither stimulatory nor contractionary to the economy, is 3%.
“There are very few bright spots in the economy – the dairy sector is one – and we do need to move quickly with 1.25% of reductions in the official cash rate,” Smith said.
Annual non-tradable inflation (largely domestic) slowed 0.4% to 4.5%, weaker than the RBNZ expectation of 4.7%. Tradable inflation (largely imported) was at minus 1.1%, slightly higher than the central bank’s forecast of minus 1.5%.
ANZ said the RBNZ won’t welcome slightly higher-than-forecast headline inflation, but a small downside miss on non-tradable inflation should trump the small upside miss on the tradable side, meaning a 50-basis points rate cut (on Feb 19) remains appropriate.
Wall Street had a strong day as the major markets cheered President Donald Trump’s pivot away from enacting sweeping tariffs on his first day in office.
Instead, Trump issued a broad memorandum directing federal agencies to study what he deems as unfair trade policies with foreign countries.
One commentator said that after a four-year hiatus, traders will have to get comfortable with presidential musings delivered via social media apps and inconsistent policy claims that clash with previous statements, often sent only hours apart.
The Dow Jones Industrial Average increased 538 points or 1.24% to 44,025.81; the S&P 500 was up 0.88% to 6,049.24; and the Nasdaq Composite gained 0.64% to 19,756.78.
The US reporting season was going strong, with Netflix delivering a record earnings quarter on the back of 19m additional paid subscribers, double what was estimated. Netflix rose 14.39% to US$994.80 (NZ$1,757.42) in after-hours trading.
Rocket Lab hit a record high after climbing more than 30% to US$31.45, benefitting from Trump’s pledge in his inauguration speech for prioritising a mission to Mars and planting the Stars and Stripes flag on the planet.
Local stocks
At home, market leader Fisher and Paykel Healthcare was unchanged at $38.30 on trade worth $12.8m. Smith said the company may be insulated from tariff increases to some degree by having clauses in some of its contracts of passing on costs to customers.
Freightways was up 11c to $10.71; a2 Milk added 10c to $6.49; Contact Energy gained 7c to $9.47; SkyCity improved 3c or 2.14% to $1.43; and Sky TV increased 10c or 3.46% to $2.99.
Oceania Healthcare was up 2c or 2.56% to 80c; Investore gained 2c or 1.77% to $1.15; Marsden Maritime Holdings increased 7c or 2.17% to $3.30; and NZX added 3c or 2.05% to $1.49.
Infratil, which has invested in renewable energy in the US through Longroad Energy, was down 18c to $11.72. Trump, favouring drilling for oil and gas, has ordered an immediate pause to the disbursement of funds under the Inflation Reduction Act and suspended new or renewed leases for offshore and onshore wind projects.
Spark decreased 4.5c to $3.005; KMD Brands was down 1c or 2.38% to 41c; South Port NZ declined 19c or 3.25% to $5.66; Fonterra Shareholders’ Fund shed 11c or 2.2% to $4.88; Rakon fell 3c or 4.84% to 59c; and 2 Cheap Cars was down 2c or 2.56% to 76c.
Cancer diagnostics company Pacific Edge was down 0.003c or 4.92% to 5.8c after reporting steady test numbers for the quarter ending December. Total laboratory throughput was up 0.7% to 7,092 tests compared with the previous quarter.
The United States throughput increased 2.2% to 5,808 tests, and Asia Pacific volumes were down 5.6% to 1,284 tests, reflecting the seasonal holiday slowdown in NZ. Pacific Edge said the trends reflect the ongoing impact of Medicare funding uncertainty.
Chatham Rock Phosphate, unchanged at 9.9c, is selling four mining leases at the Queensland Korella North and South properties to the Marshall Group for $4.5m. A royalty of A$10 (NZ$11.07) per tonne will be paid for the first 0.19m tonnes of phosphate production.
| « Fisher and Paykel Healthcare feels brunt of Trump's proposed tariffs |
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