Chipmakers have at times been overwhelmed by the sharp increase in demand. Photo / AFP via Getty
International
US
US markets were all in the red this morning. The US House of Representatives is due to vote on a bill to lift the government’s US $31.4 trillion debt ceiling.
On Tuesday the House Rules Committee voted 7-6 to advance the deal. The legislation would suspend the US debt limit through to 1 January 2025.
At the time of writing the S&P 500, the Nasdaq Composite and the Dow Jones Industrial Average had all fallen by 0.4 per cent.
Intel Corp shares were trading 7 per cent higher at the time of writing.
During a conference, Chief Financial Officer David Zinsner expressed optimism about the chip making company’s future, saying it anticipates a turnaround soon.
He also mentioned that second-quarter revenue is expected to align with the higher end of their guidance. He said the data centre division was “showing signs of improvement”, and he anticipates a reduction in inventory levels in China after the third quarter.
Tesla announced its plan to showcase the updated Model 3 car during Elon Musk’s trip to the Shanghai factory. Tesla shares were trading down 0.4 per cent to US $200.4.
HP Inc shares slid 4.9 per cent to US $29.4 per share at the time of writing, following the release of mixed quarterly results by the tech hardware company.
HP reported a revenue of US $12.9 billion, falling slightly below the analysts’ expectations of US $13.07 billion as per Refinitiv’s estimates. However, the company’s adjusted earnings per share came in at US 80 cents, surpassing the projected US 76 cents per share.
Commodities
Brent Oil is currently trading down 1.1 per cent at US $72.7 a barrel, while gold is trading slightly higher by 0.4 per cent to US $1,966.1 per ounce.
Bloomberg reported the first monthly drop of the year for Bitcoin decreasing roughly 8 per cent in May, which could lead to Bitcoin’s worst month since the FTX exchange collapse in 2022.
New Zealand
The NZX 50 closed down 0.55 per cent ending the day at 11,813.
The May quarterly review of the MSCI global indices took place yesterday. Adjustments included Ebos Group’s weighting in the Large Cap index, reducing slightly, and despite wider selling pressure the share price increased 53 cents to $42.1.
Automation and robotics solutions company Scott Technology ended the day 3.4 per cent higher at $2.75 per share following their announcement of new pipeline contracts.
Scott Technology has secured its first contract to supply an automated modular mining solution to Mineral Resources Limited valued at $12 million.
The deal signals the commercial launch of Scott Technology’s modular mining product offering which was prototyped earlier in the financial year.
Synlait Milk announced a reduction in forecast base milk price for the 2022-2023 season to $8.2 per kgMS from $8.3 kgMS, with the opening forecast for the 2023-2024 season at $8 per kgMS.
Synlait ended the day down 1.3 per cent to $1.55. Weaker than expected commodity prices, continued high cost of imported lactose into New Zealand and subdued global economic activity contributed to the revision of forecasts.
Kiwi Fruit exporter Zespri reported weaker financial results for the 2022-2023 period, attributed to a combination of severe weather conditions, labour shortages and supply chain issues.
Global operating revenue fell to $4.2 billion including license revenue, from $4.4 billion last financial year. Net profit after tax was $237.8 million down from the $361.5 million reported in the 2021-2022 season.
ANZ released its May business outlook report which showed an improvement in both business confidence and expected own activity levels. Business confidence lifted 13 points from -43.8 to -31.1, while expected own activity rose from -7.6 to -4.5.
Rest of the World
European stocks were down on Fed hike worries, as job vacancies came in higher than expected.
China’s manufacturing PMI for May dropped to 48.8, down from 49.2 in the previous month. The reading fell short of expectations, which were set at 49.5.
Australia
The Australian share market dropped following the announcement of the April year end CPI figures, with the ASX 200 trading down 1.6 per cent.
Australia reported its CPI print for the month of April, with the Australian Bureau of Statistics announcing a surge in inflation to 6.8 percent over the past twelve months.
This annual figure is reported to have exceeded consensus forecasts and marks an increase from the 6.3 percent figure recorded in March.
Michelle Maquadt, head of price statistics at the Bureau of Statistics, highlighted the significant impact of changes in petrol taxes on the annual movement.
Other notable contributors to the inflation increase included housing, with an 8.9 percent rise, food and non-alcoholic beverages with a 7.9 per cent increase, and recreation and culture prices with a 6.4 per cent rise.
Mining companies faced a decline as coal futures prices continued to decrease.
Additionally, iron ore prices also experienced some weakness. Whitehaven Coal fell 6.5 per cent, reaching AUD $5.7, while New Hope Corporation tumbled 4.2 percent to AUD $4.6. Australia’s largest miner, BHP Group, lost 3.4 per cent, ending the day at AUD $42.
Bank of Queensland shares decreased 5.4 per cent to AUD $5.5 yesterday as the bank announced its entry into two enforceable undertakings with financial regulators in response to significant breaches.
The regulators involved are Austrac and the Australian Prudential Regulation Authority (Apra).
Austrac expressed concerns about the bank’s ability to comply with Anti-Money Laundering and Counter-terrorism Financing laws, especially regarding the adequacy of their systems.
Apra identified weaknesses in the bank’s risk management approach and corporate culture.
As a penalty, the bank has agreed to allocate an additional AUD $50 million in regulatory capital, and the agreements with the regulators will require improvements in compliance, systems and risk management.
Coming up today
US: Manufacturing PMI, Construction Spending, ISM Manufacturing, Initial Jobless Claims
Eurozone: CPI, Unemployment Rate
China: Caixin PMI Manufacturing
Australia: CoreLogic House Prices
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All market pricing and announcements are sourced from Refinitiv, NZX and ASX.
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