On Point

There's plenty to monitor across the world this week. Flash PMIs for December will be out early in the week, while another highlight will be the PCE inflation report in the US on Friday. There are three major central banks meetings taking place, with the Federal Reserve in the US expected to cut interest rates again on Thursday morning and decisions from the Bank of Japan and Bank of England later than day. Here in New Zealand, a highlight will be the September quarter GDP report, while we'll also get update on dairy prices, business confidence and the housing market. The Half Year Economic and Fiscal Update (HYEFU) is also out on Tuesday, and is likely to reflect a challenging position and a further increase in the Government’s borrowing requirements.

As this year draws to a close, there are a raft of questions over what to expect from financial markets in 2025. Will the New Zealand economy recover from recession, how much further will interest rates fall, and what will that mean for the housing market? Investors are also pondering the outlook for the ailing local sharemarket, while speculating if the might S&P 500 can keep rising or if it's due for a fall. We'll try and answer some of those questions, with six predictions for 2025.

This week the global highlight will be the November CPI report in the US on Wednesday. This will be closely watched as investors look ahead to the final Federal Reserve meeting of the year next week, where the central bank is expected to reduce interest rates another 0.25 per cent. Markets will also be watching the latest inflation and trade data in China, monthly GDP in the UK and central bank decisions in Australia, Canada, Europe and Switzerland. On the local front, we'll get some further GDP partials ahead of the September quarter GDP report, which is scheduled for release late next week. A housing market update is due from the Real Estate Institute, while we'll also see the latest monthly migration figures.

It’s been a good year for the local sharemarket. The NZX 50 index is up 11.0 per cent so far, which sees it on track for its best year in four. Most of our biggest companies have performed well, but one notable exception is Spark. It’s share price is down more than 40 per cent in 2024, making it one of the biggest decliners across the entire exchange. There are several reasons for the disappointing performance. Some of these are a function of the economic backdrop, while others are of the company’s own making.