“It’s going to be a key catalyst for markets globally and it’s not long for us to wait now until we see what everybody knows, which is a rate cut,” Sullivan said.
“The dot plot is going to be key to whether it’s four more cuts or three or five, and if there’s dissent within the ranks amongst the board.
“Markets could move materially if there’s any divergence from the current expectations.”
Sullivan said that outside of California and AI-related industries, the US economy is “pretty weak”.
He said the Fed would have cut interest rates earlier, but US President Donald Trump’s tariff regime forced it to delay any changes to account for any inflationary shocks.
Back on the NZX, Sullivan pointed to Seeka, which announced an upgrade to its net profit before tax earnings guidance to between $39m and $43m.
The company previously forecast profit before tax would be between $35m and $39m.
Seeka’s share price lifted 3.84% or 16c to $4.33 after 43,275 shares changed hands on turnover worth $187,698.19.
Dairy companies had mixed results after prices dropped slightly in the latest Global Dairy Trade auction, held overnight, with a 0.8% dip across the board.
This marked the third consecutive decline after a 4.3% decrease at the previous auction and a 0.3% slide before that.
A2 Milk’s share price fell 3.2% or 33c to $9.97 after 551,973 shares changed hands on turnover worth $5.5m.
Meanwhile, Synlait Milk’s share price rose 1.49% or 1c to 68c.
The market’s largest inhabitant, Fisher & Paykel Healthcare, dropped 0.21% or 8c to $37.45 on turnover worth $14.2m.
Before the latest figures on New Zealand’s GDP are released on Thursday, Sullivan agreed with the consensus and forecast a 0.4% reduction.
“The strongest sector in our economy at the moment is dairy and primary services. When you’ve got a 5% reduction in supply and prices coming off, it’s showing that demand is waning for our key exports.
“Soft back-to-back pictures lends to more rate easing in New Zealand, even with inflation hitting the upper end of the band.”
Wall Street stocks edged down from record highs on Tuesday after solid US retail sales data, with market watchers holding their breath before the Federal Reserve rate decision.
The US central bank is overwhelmingly expected to cut interest rates for the first time in 2025, but markets are unsure what the Fed will signal about the likelihood of further cuts.
“It’s just kind of a wait-and-see move in front of the [Fed] decision so not a lot of conviction behind today’s trade,” said Briefing.com analyst Patrick O’Hare.
The broad-based S&P 500 slipped 0.1% to 6606.76, retreating slightly from Monday’s record close.
The tech-rich Nasdaq Composite Index also slid from a record, losing 0.1% at 22,333.96, while the Dow Jones Industrial Average declined 0.2% to 45,787.59.
Analysts see the recent string of US equity market records as the result of hopes the US central bank will follow an interest rate cut this week with additional cuts in the months ahead.
– Additional reporting AFP
Tom Raynel is a multimedia business journalist for the Herald, covering small business, retail and tourism.
