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

 


World Week Ahead: Italy votes, Bernanke speaks

World Week Ahead: Italy votes, Bernanke speaks

By Margreet Dietz

Feb. 25 (BusinessDesk) – Italian elections, another US budget deadline and Federal Reserve Chairman Ben Bernanke's testimony to Congress will form the focus of the coming week.

Bernanke's semi-annual update for US lawmakers on Tuesday and Wednesday will be closely watched after minutes from the latest Fed meeting sparked concern the central bank might ease or end its stimulus measures sooner than expected.

In the past week, shortened by a national holiday on Monday, the Standard & Poor's 500 Index gave up 0.3 percent and the Nasdaq Composite Index retreated almost 1 percent. The Dow Jones Industrial Average eked out a 0.1 percent gain. The S&P's slide ended seven consecutive weeks of gains.

Optimism prevails, however, as the latest earnings season provided evidence that corporate America by and large has managed to stay on track with an increased focus on the bottom line.

As a case in point, Hewlett Packard surprised investors with better-than-expected earnings and outlook. Its shares surged higher on Friday as at least eight analysts increased their target prices.

“The support for the market remains,” John Carey, fund manager with Boston-based Pioneer Investment Management, told Bloomberg News. “There’s been a fairly good stream of earnings. There’s certainly nothing to scare anyone.”

A potential threaten to consumers, however, are the US$85 billion in automatic federal spending cuts that are scheduled to take effect on March 1 unless Congress finds agreement to prevent them.

"It's at this point a political hot button in Washington but a very low level investor concern," Fred Dickson, chief market strategist at DA Davidson & Co in Lake Oswego, Oregon, told Reuters.

A slew of key economic data are scheduled for release in the coming days including consumer confidence, due Tuesday, and gross domestic product, due Thursday.

The Commerce Department will revise its estimate of fourth quarter GDP to 0.5 percent expansion from a 0.1 percent contraction, according to a Bloomberg survey of economists.

There are also reports on durable goods orders on Wednesday and the PMI manufacturing index on Friday.

The Treasury is scheduled to sell US$35 billion of two-year notes on Monday, the same amount of five-year debt on Tuesday and US$29 billion of seven-year bonds on Wednesday.

In Europe, the benchmark Stoxx 600 Index gained 0.4 percent for the week, as better-than-expected corporate earnings and confidence in Germany outweighed the European Commission's forecast that the euro-zone economy will contract for a second year in 2013.

Gross domestic product in the euro area will drop 0.3 percent this year, following a November forecast for a 0.1 percent expansion, the commission said on Friday. In keeping with ECB President Mario Draghi's optimism that the outlook is improving, the EC is forecasting a euro area expansion of 1.4 percent in 2014.

On Monday markets will get a chance to react to Moody's decision Friday night to downgrade the UK. The agency reduced its rating to Aa1 from Aaa, citing "continuing weakness in the UK's medium-term growth outlook" and its "high and rising debt burden." The outlook on the rating is now stable, Moody's said.

Investors also will be keeping a close eye on elections in Italy, with voters heading to the polls on Sunday and Monday. The latest polls showed front-runner Pier Luigi Bersani is unlikely to gain enough seats to govern without a coalition, according to Bloomberg.

A victory for former prime minister Silvio Berlusconi, who had been advancing in the polls in the last month, would be viewed as bad news for the country's willingness to tighten its national belt to meet euro zone budget deficit standards.

On Monday, Italy is also scheduled to auction up to 3 billion euros of bonds.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Power Outages, Roads Close: Easter Storm Moving Down Country

The NZ Transport Agency says storm conditions at the start of the Easter break are making driving hazardous in Auckland and Northland and it advises people extreme care is needed on the regions’ state highways and roads... More>>

ALSO:

Houses (& Tobacco) Lead Inflation: CPI Up 0.3% In March Quarter

The consumers price index (CPI) rose 0.3 percent in the March 2014 quarter, Statistics New Zealand said today. Higher tobacco and housing prices were partly countered by seasonally cheaper international air fares, vegetables, and package holidays. More>>

ALSO:

Notoriously Reliable Predictions: Budget To Show Rise In Full-Time Income To 2018: English

This year’s Budget will forecast wage increases through to 2018 amounting to a $10,500 a year increase in average full time earnings over six years to $62,200 a year, says Finance Minister Bill English in a speech urging voters not to “put all of this at risk” by changing the government. More>>

ALSO:

Prices Up, Volume Down: March NZ House Sales Drop 10% As Loan Curbs Bite

New Zealand house sales dropped 10 percent in March from a year earlier as the Reserve Bank’s restrictions on low-equity mortgages continue to weigh on sales of cheaper property. More>>

ALSO:

Scoop Business: Chorus To Appeal Copper Pricing Judgment

Chorus will appeal a High Court ruling upholding the Commerce Commission’s determination setting the regulated prices on the telecommunications network operator’s copper lines. More>>

ALSO:

Earlier:

Cars: Precautionary Recalls Announced For Toyota Vehicles

Toyota advises that a number of its New Zealand vehicles are affected by a series of precautionary global recalls. Toyota New Zealand General Manager Customer Services Spencer Morris stressed that the recalls are precautionary. More>>

ALSO:

'Gardening Club': Air Freight Cartel Nets Almost $12 Million In Penalties

The High Court in Auckland has today ordered Swiss company Kuehne + Nagel International AG to pay a penalty of $3.1 million plus costs for breaches of the Commerce Act. Kuehne + Nagel’s penalty brings the total penalties ordered in this case to $11.95 million ... More>>

ALSO:

Crown Accounts: Revenue Below Projections

Core Crown tax revenue has increased by $1.9 billion (or 5.0%) compared to the same time last year. However this was $1.1 billion less than expected and is reflected across most tax types, continuing the pattern of recent months. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news