Devon Funds Morning Note - 22 April 2026

Wednesday 22nd April 2026

No Talks

Global

US stocks have eased back from record levels, ending modestly lower amid renewed US-Iran tensions and a ceasefire deadline fast approaching, after VP Vance and the coalition announced they have called off the trip to Pakistan following Iran's announcement that it will not attend the talks. The S&P 500, Nasdaq, and Dow all fell 0.6% at the close.

Iranian State Media revealed post US market close that attending negotiations with the US is a “waste of time”, saying “Washington's excessive demands, unrealistic expectations, constant shifts in stance, repeated contradictions, and the ongoing naval blockade, which it considers a breach of the ceasefire."

President Trump in response has extended the ceasefire, citing “Based on the fact that the Government of Iran is seriously fractured, not unexpectedly so and, upon the request of Field Marshal Asim Munir, and Prime Minister Shehbaz Sharif, of Pakistan, we have been asked to hold our Attack on the Country of Iran until such time as their leaders and representatives can come up with a unified proposal. I have therefore directed our Military to continue the Blockade and, in all other respects, remain ready and able, and will therefore extend the Ceasefire until such time as their proposal is submitted, and discussions are concluded, one way or the other”.

Among the news, markets continue to stay in a holding pattern, showing resilience amid developments in the conflict, with investors waiting for negotiations to play out on Iran’s timeline, while profit-taking is in place. The Mag 7 index fell 0.8%, along with Cyclicals (-0.7%), while Software (+0.4%) and Energy (+1.3%) outperformed.

S&P 500 Holding at Highs

Elsewhere, US retail sales handily beat expectations in March, jumping 1.7% month-on-month (the strongest monthly gain in over a year) as a 15.5% surge in gasoline station receipts, alongside solid underlying demand, pushed Treasury yields higher. Even excluding autos and gas, sales rose a firm 0.6%, and the GDP relevant control group climbed 0.7%, though economists noted that unusually warm weather and large tax refunds likely flattered the data, raising doubts about how sustainable this pace of spending will be.

Across the UK, labour data sent mixed signals: payrolled employees fell by 11k in March, pointing to a cooling jobs market, but the unemployment rate for the three months to February unexpectedly dropped to 4.9%. Private sector regular pay (ex bonuses) rose 3.2% year-on-year over the same three month period, in line with expectations and consistent with a gradual moderation in wage inflation, so markets largely looked through the release and stayed focused on global factors. Pricing still has the BoE on hold next week, with a slightly better than even chance of a hike by June and a full 25bp move priced by July.

New Zealand

Back home, the NZX 50 drifted higher, closing up 0.1%. The tone has been mixed beneath the surface: Logistics and Healthcare names such as Mainfreight (+3.7%) and Ryman (+4.0%) outperformed, but were offset by weakness in Cyclical’s and Industrials, including Tourism Holdings Limited (-3.7%), and Fletcher Building (-1.7%).

New Zealand Consumer Price Index data came in stronger than expected, with the CPI up 0.9% quarter-on-quarter and 3.1% year-on-year, driven mainly by higher energy and food costs and keeping price growth above the Reserve Bank's 1-3% target band.

Most of the Iran-related fuel shock has yet to show up in the data, so inflation is likely to re-accelerate in Q2, but the call here is still for the OCR to remain on hold through 2026, on the view that rising spare capacity and soft wage growth will do the disinflationary heavy-lifting that further rate hikes otherwise would. However, the market sees it differently, with a 25bps rate hike in May, while a July hike has already been fully priced in. The key release to watch ahead of the May Monetary Policy Statement is the Q1 labour market report, which will show whether cooling jobs and pay growth are unfolding as expected.

Further to this, the NZIER Quarterly Business Confidence survey has shown business sentiment has deteriorated sharply, unwinding the surge in optimism seen late last year. A net 1% of firms now expect economic conditions to improve over the coming months, down from 39% in the December quarter, a level not seen since late 2024.

Elsewhere, Global dairy prices softened in the latest GDT auction, with the headline index falling 2.7%, driven by sharp declines in milk-fate products. Anhydrous milk fat fell 9.6%, while butter dropped 7.9%, only partly offset by modest gains in cheddar (+1.1%) and skim milk powder (+3.2%), while whole milk powder (key to New Zealand exporters) slipped a further 0.6%, signalling a slightly weaker near term pricing backdrop for farmgate returns.

Australia

Across the Tasman, the ASX 200 finished little changed in the latest session, slipping 0.04% to 8,947.5 as the index once again oscillated within the tight 8,900–9,000 range that has contained trade for days, although the back half of the week will be catalyst-heavy with a wave of quarterly updates due and the US-Iran ceasefire deadline looming.

No sector stood out on the day, with all groups trading within 1.0%. Consumer Staples ended the best on defensive buying with Coles and Woolworths each adding 0.7% and 0.9%, respectively.

Energy was the weakest, falling 0.9% as investors await news from the Middle East. Viva Energy recovered some ground, taking back 0.9% after the previous session's fall.

Amongst company results, Cleanaway advanced 2.6% on its Investor Day, while HUB24 (-8.3%) fell despite reporting another strong quarter of net inflows, as a rich valuation, negative market movements, and a one off institutional outflow overshadowed the solid underlying growth in funds under administration. Lynas Rare Earths (-2.1%) also declined after its quarterly update showed revenue under pressure from softer rare-earth prices and higher project costs, with sales coming in below market expectations, prompting some profit taking after a strong run in the shares.

At an individual level, Qantas has matched Virgin's aggressive domestic sale, releasing 2 million discounted seats across 90 routes, including peak holiday periods, in a bid to stimulate demand and defend market share on key leisure and regional corridors.

Separately, Infratil’s data centre arm, CDC Australia, has been awarded a first-time investment-grade credit rating of Baa2 (stable) from Moody’s, which should lower its funding costs, broaden access to debt markets and support the capital intensive AI/data centre build out.

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