Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


World Week Ahead: Correction chatter

World Week Ahead: Correction chatter

By Margreet Dietz

Nov 12 (BusinessDesk) – As markets swoon in the wake of the US presidential election and as the fiscal outlook in both the US and the EU remains clouded, investors appear set to leap to the sidelines.

In the past five days, the Dow Jones Industrial Average dropped 2.1 percent, the Standard & Poor's 500 Index shed 2.4 percent, and the Nasdaq Composite Index fell 2.6 percent. All 10 of the S&P 500’s industry groups fell last week.

"There's a technical breakdown in the market that indicates further losses," Adam Sarhan, chief executive of Sarhan Capital in New York, told Reuters . "A 10 percent drop is the next big line in the sand."

It won’t help investors’ nerves to have a short week for trading after having lost two days when Hurricane Sandy swamped the US East Coast. Wall Street is closed on Monday for the US Veteran's day holiday.

As Sarhan noted, there’s good reason for chatter about a potential correction. The S&P 500 has been trading in a range between the 50-day moving average of 1,433.50 and the 200-day moving average of 1,380.98 for about two weeks; a significant break below that lower level could be a precursor to further weakness, according to analysts.

One reason for the pall over Wall Street is continuing mixed corporate signals. Shares of Walt Disney and Groupon were among those that got hammered because of disappointing results last week: slowing sales growth is a worry about what the next few quarters may bring.

With results in from 449 of the S&P 500 companies, third-quarter earnings now are estimated to have declined 0.3 percent from a year ago, which is slightly better than the forecast at the start of the reporting period, according to Reuters. Only 38 percent of companies have surpassed expectations for third-quarter sales, Thomson Reuters data showed.

Earnings due this week include Wal-Mart and Home Depot.

Economic indicators poised for release in the coming days include the producer price index, retail sales, and consumer price index.

Also pending are the minutes from the latest FOMC meeting. In the statement released on October 24, the committee said it was “concerned” that the economy wasn’t expanding fast enough to bolster the jobs market. “Furthermore, strains in global financial markets continue to pose significant downside risks to the economic outlook.”

Among those risks is the lingering debt crisis in Europe, which shows no sign of abating and may be set to deepen as the EU’s economy heads south. The euro zone’s gross domestic product contracted 0.1 percent in the third quarter, economists in a Bloomberg survey forecast before data due November 15. The economy shrank 0.2 percent from April through June after stagnating in the first quarter.

In Europe, the Stoxx 600 Index suffered a 1.7 percent decline in the past five days. The euro weakened against the Japanese yen and the greenback last week, sliding 2.1 percent and 0.9 percent respectively in the past five days.

While Greek politicians will vote today on the country’s 2013 budget -- which includes more austerity measures, it may be several more weeks until Greece’s international lenders transfer fresh bailout funds. EU finance ministers await a report on the country’s compliance with bailout terms.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Statistics: Net Annual Migration Passes 71,000

A record 71,300 more migrants arrived in New Zealand than left in the January 2017 year, Statistics New Zealand said today. This surpassed the previous annual record set in December 2016. More>>

ALSO:

Fossils: Ancient Penguins Lived Alongside Dinosaurs?

Penguins are much older than previously thought and their evolution probably dates back to the days of the dinosaurs, according to research on the fossilised leg bone and toes of a giant ancient penguin found in rocks near Waipara, North Canterbury. More>>

No Voda/Sky: Commission Declines Clearance For Merger

The Commerce Commission has declined to grant clearance for the proposed merger of Sky Network Television and Vodafone New Zealand. More>>

ALSO:

EARLIER:

Power: IEA Report On New Zealand's Energy System

Outside of its largely low-carbon power sector, managing the economy’s energy intensity and greenhouse gas emissions while still remaining competitive and growing remains a challenge. More>>

ALSO:

NASA: Seven Earth-Size Planets Around A Single Star

NASA's Spitzer Space Telescope has revealed the first known system of seven Earth-size planets around a single star. Three of these planets are firmly located in the habitable zone, the area around the parent star where a rocky planet is most likely to have liquid water. More>>

ALSO:

Auckland Transport Case: Men Guilty Of Corruption And Bribery Will Spend Time In Jail

Two men who were found guilty of corruption and bribery in a Serious Fraud Office (SFO) trial have been sentenced in the Auckland High Court today... The pair are guilty of corruption and bribery offences relating to more than $1 million of bribes which took place between 2005 and 2013 at Rodney District Council and Auckland Transport. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news