Thu Sep 19 06:23:23 UTC 2024: ## Transtasman Markets Rise After Fed’s “Jumbo” Rate Cut
**Wellington, New Zealand** – The New Zealand and Australian share markets performed better than their American counterparts following a significant interest rate cut by the US Federal Reserve. The S&P/NZX 50 Index closed at 12,12,665, up 0.62%, while the S&P/ASX 200 Index reached a record high of 8189.8 points.
The Fed slashed its cash rate by 0.5% to 4.75-5%, marking the first cut in four years and the largest since the Global Financial Crisis. The Fed cited confidence in inflation moving toward its 2% target and a balanced assessment of economic risks.
Despite the initial surge in US indices following the announcement, the Dow Jones Industrial Average closed 0.25% lower, the S&P 500 fell 0.29%, and the Nasdaq Composite shed 0.31%.
Greg Smith, head of retail with Devon Funds Management, noted the cut was unexpected and that Fed Chair Jerome Powell reassured markets that a “soft landing” for the US economy remains possible.
Locally, New Zealand’s GDP fell 0.2% in the June quarter, exceeding the Reserve Bank’s forecast of a 0.5% dip. While ANZ Research acknowledged the positive surprise, they remain cautious about economic momentum, predicting continued disinflation and gradual OCR cuts.
ANZ’s August data showed a 1.8% decrease in merchant and card spending, with discretionary spending taking the biggest hit.
The news was met with mixed reactions on the NZX. Notable gainers included Ebos Group (up 2.85%), Fletcher Building (up 4.64%), and Infratil (up 1.89%). Conversely, Eroad shed 6.45%, Blackpearl Group fell 12.57%, and Seeka declined 3.47%.
Auckland International Airport, up 1c to $7.46, launched its $200 million retail offer as part of its $1.4 billion capital raise. Used vehicle dealer 2 Cheap Cars tumbled 4.05% after warning of lower profits due to changing market conditions and reduced consumer spending.
First Piper 