Summary:
- Walmart and Home Depot rose.
- RBNZ due to give their midweek policy decision.
S&P 500 end the trading day in the green
The Nasdaq suffered on Tuesday as technology equities fell, weighing on the Dow, while Walmart and Home Depot rose as a result of better-than-expected results and outlooks. Along with the S&P 500 retail index, the consumer discretionary and basics sectors both experienced significant increases.
Home Depot outperformed forecasts for the most recent quarter of sales, and Walmart predicted a lesser decline in full-year earnings than was originally anticipated. The 10-year Treasury yield increased, which hurt high-growth firms in the technology sector. Stocks have recovered since mid-June after stumbling for the most of the first half of the year, aided in part by Corporate America's better-than-expected results. Investors are also hopeful that the Federal Reserve will be able to provide a "soft landing" for the economy as it tightens monetary policy and increases interest rates to lower inflation that has been historically high.
GSPC Price Chart
NZD ahead of the RBNZ policy decision
Following the Reserve Bank of New Zealand's (RBNZ) midweek policy update, analysts at investment banks Goldman Sachs and HSBC are watching for NZD depreciation. Markets anticipate that the RBNZ will increase interest rates by another 50 basis points to 3.0%, but any significant changes in the currency are more likely to be caused by the RBNZ's tone in its guidance. "Importantly, we would not be surprised to see slightly more dovish guidance from the RBNZ," says Kamakshya Trivedi, Co-head of Global Foreign Exchange Research at Goldman Sachs.
The meeting, according to Goldman Sachs, is expected to be one of the major developments for the foreign exchange markets this week, and the results are most likely to support their bearish NZ Dollar thesis. Their economists continue to be less pessimistic than the market currently is about the trajectory of upcoming RBNZ rate hikes.
Sources: finance.yahoo.com, poundsterlinglive.com