NZ
New Zealand’s GDP rose by +0.9% in the second quarter of 2023 well ahead of expectations, while a revised first quarter GDP was flat (instead of being down -0.1%). The data was helped by population growth of +2% and stronger services activity across the board drove growth while the retail sector was the main laggard.
Noting directors of Port of Tauranga are asking for a +27.8% increase to their fee pool. They cite the need to “attract and retain high performing directors” — it’s pretty unconvincing, and a hard ask in a market where total freight volumes are on the decline. We tend to think that director’s fees should be linked to performance, and with POT down ~8% YTD versus the NZ50 (down ~2.89%) its hard to see the net benefit for shareholders here.
US
US markets (S&P500 Index, -1.6%) fell for a third day in a row. The Federal Reserve announced it would leave interest rates unchanged but forecasted another rate hike before end of the year. JPow also indicated fewer rate cuts next year, essentially saying it would need to keep rates higher for longer because of stubborn inflation. Adding to the risk is possible government lockdown — institutionals are putting the risk of a shutdown at ~80%. Tech remains hardest hit, notably Nvidia now down -18% from its peak reached just in the end of August
10-Year Treasury Yield (25-year Chart 1998-2023)
The Bank of England held its interest rate flat at 5.25%, following 14 consecutive rate hikes as inflation starts to slow down. However, policymakers have reiterated they would maintain a tight monetary policy if necessary. The Swedish and Norwegian central banks both opted to hike interest rates, while the Swiss National Bank paused its hiking cycle.
