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Company News, Fundamental Analysis

New Zealand Dollar Outlook

Nasdaq 100 Futures Lower

The New Zealand Dollar may be readying to resume its broader downtrend against the US Dollar as well as the Australian Dollar. Over the past 24 hours, the sentiment-linked Kiwi Dollar was amongst the worst-performance G10 currencies. Risk aversion picked up the pace on Wall Street after the closing bell, sending S&P 500 futures lower ahead of Thursday’s Asia-Pacific trading session.

This followed disappointing earnings from Meta Platforms Inc., the parent company of Facebook. Its share price declined over 20% during after-hours trade following weak guidance. Given that Meta Platforms is one of the largest companies by market capitalization, as well as part of the FAANG group, this likely sent Nasdaq 100 futures lower due to broader market implications.

A similar scenario unfolded in January when shares of Netflix fell by a similar amount in after-hours trade, exacerbating market volatility. This is placing a lot of focus on earnings from another FAANG company, Amazon. The latter is due to report after the closing bell on Thursday. Another soft reading from a FAANG company risks restoring market volatility following calm waters over the past few sessions.

Tech companies are acutely vulnerable to a rising interest rate environment, signaled by the Federal Reserve last week. The growth-oriented sector places greater emphasis on future profits. Rising interest rates slowly degrade those. That is why all eyes will be on January’s US non-farm payrolls report on Friday. Persistently strong wage data may boost inflation expectations, and thus Fed rate hike bets.

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