{"id":394913,"date":"2026-04-24T05:10:09","date_gmt":"2026-04-24T05:10:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/nz\/394913\/"},"modified":"2026-04-24T05:10:09","modified_gmt":"2026-04-24T05:10:09","slug":"stock-takes-ai-boom-leaves-new-zealand-market-behind-as-wall-street-races-to-record-highs","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/nz\/394913\/","title":{"rendered":"Stock Takes: AI boom leaves New Zealand market behind as Wall Street races to record highs"},"content":{"rendered":"
\u201cAt the same time, you have a record percentage of US household assets \u2013 more than any other time in history \u2013 invested in the US market.<\/p>\n
\u201cSo it\u2019s an 1800s railroad boom all over again.\u201d<\/p>\n
At the same time, a yawning gap has opened up between US consumer confidence and a red-hot US sharemarket.<\/p>\n
According to the University of Michigan\u2019s monthly survey of consumers, consumer sentiment sank 11% this month, extending a decline that began with the start of the Iran conflict, and is down 9% from a year ago.<\/p>\n
It was also the index\u2019s lowest reading in the survey\u2019s 74-year history.<\/p>\n
Goodson said the index highlighted the \u201cremarkable disconnect\u201d between US consumer confidence and the market.<\/p>\n
At the same time, there is a greater concentration of household wealth invested in equities than ever before, led by demand for AI-related stocks.<\/p>\n
In the tiny New Zealand market, the only real play in the AI data centre space is Infratil, which has held up fairly well.<\/p>\n
So far this year, shares in Infratil have gone against the run of play, gaining 17% to around $12.38 today.<\/p>\n
Goodson said only a small proportion of S&P 500 names are outperforming \u2013 typically the ones focused on the AI space.<\/p>\n
Since the start of America\u2019s launch of its \u201cEpic Fury\u201d attack on Iran, only 26% of S&P 500 companies have outperformed.<\/p>\n
Over 40% of the S&P 500\u2019s market cap is now tied to the AI quality growth theme.<\/p>\n
At the same time, US consumer sentiment is \u201cin the toilet\u201d.<\/p>\n
Household names like Nike have been annihilated, the company this month saying it expects sales in China to drop by 20% in the fourth quarter.<\/p>\n
Nike shares have fallen by 28% in the year to date.<\/p>\n
\u201cWhat you\u2019re seeing is consumer-exposed stocks in the US are in a world of pain, and the rest of the market is sailing on,\u201d Goodson said.<\/p>\n
\u201cThe biggest thing in the US has been the divergence between the economy and the market.\u201d<\/p>\n
Mercury has upgraded its earnings forecast.<\/p>\n
Mercury\u2019s upgrade<\/p>\n
Power company Mercury upgraded its 2026 forecast this week, mainly on strong hydro generation.<\/p>\n
It now expects its earnings before interest, tax, depreciation, amortisation and fair value adjustments (ebitdaf) to come in at $1.05 billion in the June year, up from its previous guidance of $1.0b.<\/p>\n
In the nine months to March, total generation was up 14% year on year, while mass market electricity prices were up 6% and gas prices were up 37%.<\/p>\n
Investment research group Morningstar said Mercury is on track for a strong rebound from last year\u2019s drought.<\/p>\n
\u201cIn addition to above-average rainfall, earnings are benefiting from early completion of a wind farm and significant retail price uplifts.\u201d<\/p>\n
Mercury\u2019s lake storage is well above average for this time of year, a favourable position heading into winter \u2013 New Zealand\u2019s peak demand period.<\/p>\n
\u201cMercury should prove highly resistant to the global energy shock caused by the Iran war, with a generation fleet of hydro, geothermal and wind,\u201d Morningstar said.<\/p>\n
\u201cWe forecast modest earnings downside in fiscal 2027 as rainfall normalises.<\/p>\n
\u201cBeyond that, completion of developments and retail price hikes to pass through high wholesale prices are likely to keep ebitda [earnings before interest, tax, depreciation and amortisation] ticking higher at about 6% per year.\u201d<\/p>\n
Forsyth Barr said Mercury was well-positioned to continue its strong momentum through the fourth quarter of 2026 and into 2027.<\/p>\n
\u201cStrong wholesale electricity prices from this point create further upside for Mercury\u2019s 2026 earnings, but also 2027,\u201d it said.<\/p>\n
\u201cIt is very helpful having full lakes heading into winter.\u201d<\/p>\n
KMD falls short<\/p>\n
Sub-underwriters for KMD Brands have taken up the shortfall arising from its heavily discounted but undersubscribed rights offer.<\/p>\n
KMD said this week that it had completed the retail shortfall bookbuild component of its $58.5 million rights offer. Gross proceeds came to $65.3m.<\/p>\n
\u201cNet proceeds will be used to reduce KMD\u2019s net debt position and strengthen the balance sheet, and in conjunction with the refinanced debt facility, provide a stable balance sheet to enable execution of KMD\u2019s Next Level strategy,\u201d the company said.<\/p>\n
About 126.4 million new shares were taken up in the retail bookbuild shortfall, while the 42.9 million new shares not taken had been fully allocated to the sub-underwriters.<\/p>\n
Forbar on Ryman<\/p>\n
Shares in Ryman Healthcare have lost about 29% in the year to date on concerns about a softer economy, but Forsyth Barr said the pessimism surrounding the stock had been overdone.<\/p>\n
The broker said the decline was despite both Ryman and peer Summerset reporting limited impact so far from the conflict in the Middle East.<\/p>\n
\u201cWhile we acknowledge that uncertainty is elevated, Ryman\u2019s share price now incorporates unwarranted pessimism in our view,\u201d Forsyth Barr said.<\/p>\n
\u201cWe have pushed back any recovery in unit prices to 2028, but still expect Ryman to more than triple annuity earnings from 2026 to 2029,\u201d it said.<\/p>\n