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

 


While you were sleeping: Hope fades for budget deal

While you were sleeping: Hope fades for budget deal

Dec 28 (BusinessDesk) – Wall Street sank as Senate Majority Leader Harry Reid warned the US appeared set to head over the so-called fiscal cliff as an agreement between Democrats and Republicans before the year-end deadline seems unlikely.

“I don’t know time-wise how it can happen now,” Reid said in the Senate. He blamed Republicans for a lack of cooperation.

Americans are worried too. Consumer confidence weakened more than anticipated in December, as the Conference Board’s index of sentiment dropped to 65.1 from a revised 71.5 reading the prior month. To be sure, consumers’ assessment of current conditions improved in December, according to the board.

“The sudden turnaround in expectations was most likely caused by uncertainty surrounding the oncoming fiscal cliff," Lynn Franco, the board's Director of Economic Indicators, said in a statement. "While consumers are quite negative about the short-term outlook, they are more upbeat than last month about current business and labour market conditions.”

In afternoon trading in New York, the Dow Jones Industrial Average shed 0.85 percent, the Standard & Poor's 500 Index dropped 1.15 percent and the Nasdaq Composite Index weakened 1.04 percent.

US Treasuries, however, benefitted as investors sought refuge from the fiscal uncertainty and the potential impact on the economy and corporate profits.

“It’s clear heels are dug in in Washington, and we seem to be moving further away from a resolution and closer to the possibility of going over the cliff,” Scott Graham, head of government bond trading at Bank of Montreal’s BMO Capital Markets unit in Chicago, one of the 21 primary dealers that trade with the Federal Reserve, told Bloomberg News.

“The fear and worry is pushing stocks lower and Treasuries higher,” Graham said.

Still, the latest data on the labour and housing market bested expectations. Purchases of new houses climbed 4.4 percent in November to a 377,000 annual pace, the highest level in more than two years, according to Commerce Department data.

Applications for jobless benefits dropped 12,000 to 350,000 in the week ended December 22, according to Labor Department figures.

“If you could take the fiscal cliff off the table, if you could get the gorilla out of [the] corner of the room, the platform for growth in 2013 is looking reasonably solid,” John Ryding, chief economist of RDQ Economics in New York, told Bloomberg News. “But how do you get the gorilla out of the room? That’s the problem.”

In Europe, the Stoxx 600 Index eked out a gain of just under 0.1 percent from the previous close. National benchmark stock indexes also moved higher in Frankfurt and Paris, while London was steady.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Economic Update: RBNZ Says Rate Cut Seems Likely

The Reserve Bank will likely cut interest rates further as a persistently strong kiwi dollar makes it difficult for the bank to meet its inflation target, it said. The local currency fell. More>>

ALSO:

House Price Action Plan: RBNZ Signals National Lending Restrictions

The central bank wants to cap bank lending to property investors with a deposit of less than 40 percent at 5 percent and restore the 10 percent limit for owner-occupiers wanting to take out a mortgage with a deposit of less than 20 percent, according to a consultation paper released today. More>>

ALSO:

Sparks Fly: Gordon Campbell On China Steel Dumping Allegations

No doubt, officials on the China desk at MFAT have prided themselves on fashioning a niche position for New Zealand right in between the US and China – and leveraging off both of them! Well, as the Aussies would say, of MFAT: tell ‘em they’re dreaming. More>>

ALSO:

Loan Sharks: Finance Companies Found Guilty Of Breaching Fair Trading Act

Finance companies Budget Loans and Evolution Finance, run by former 1980s corporate high-flyer Allan Hawkins, have been found guilty of 106 charges of breaching the Fair Trading Act for misleading 21 borrowers while enforcing loan contracts. More>>

ALSO:

Post Panama Papers: Govt To Adopt Shewan's Foreign Trust Recommendations

The government will adopt all of the recommendations from former PwC chairman John Shewan to increase disclosure and introduce a register for foreign trusts with new legislation to be introduced next month. More>>

ALSO:

The Price Of Cheese: Cheddar At Eight-Year Low

Food prices decreased 0.5 percent in the year to June 2016, influenced by lower grocery food prices (down 2.3 percent), Statistics New Zealand said today. Compared with June 2015, cheese prices were down 9.5 percent, fresh milk was down 3.9 percent, and yoghurt was down 9.2 percent. More>>

ALSO:

Financial Advisers: New 'Customer-First' Obligations

Goldsmith plans to do away with the current adviser designations which he says have been "unsatisfactory" in that some advisers are obliged to disclose potential conflicts of interest and act in their customers' best interests, but others are not. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news