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

 


While you were sleeping: Wall Street slides

While you were sleeping: Wall Street slides

Dec 12 (BusinessDesk) – Wall Street sank as a bipartisan US budget deal removed one of the obstacles the Federal Reserve had previously identified as key to a decision on when to begin tapering its monthly bond-buying program.

“The hurdle of the budget deal has been passed and it will affect the Fed’s decision to taper in the coming months as that uncertainty has subsided,” Chad Morganlander, a Florham Park, New Jersey-based fund manager at Stifel Nicolaus & Co, told Bloomberg News.

The proposed deal still needs approval of both chambers of Congress. Fitch Ratings said the deal showed “an improvement in the functioning of budget policymaking.”

“But the proposal does not increase the federal government debt ceiling, which Congress will need to raise again by 7 February to give the Treasury the borrowing capacity it needs to meet its payment obligations and avoid further recourse to extraordinary measures,” Fitch Ratings said in a statement.

Fitch Ratings said it expects to resolve the Rating Watch Negative on the US 'AAA' sovereign rating by the end of the first quarter of 2014.

“The budget deal itself is at best a signal that we won’t shut the government down at the start of the new year,” Alexander Friedman, chief investment officer at UBS’s wealth-management unit, told Bloomberg.

In afternoon trading in New York, the Dow Jones Industrial Average dropped 0.51 percent, the Standard & Poor’s 500 Index retreated 0.75 percent, while the Nasdaq Composite Index sank 0.96 percent. Drops in shares of Nike and UnitedHealth Group, down 2.5 percent and 2.3 percent respectively weaker, led losses in the Dow.

Treasuries also declined, pushing yields on the 10-year bond 2 basis points higher to 2.82 percent.

Thirty-two economists expect the Fed to begin tapering in March, while 22 said it would scale back its US$85 billion monthly bond-buying program in January. Only 12 economists expected an announcement next week, according to Reuters poll of more than 60 economists taken this week.

"It certainly does appear that a window of opportunity could be opening up for the Fed to act next week without a sharp market reaction,” CMC Markets strategist Michael Hewson, told Reuters. "The only question remaining is as to whether they will avail themselves of it."

The same survey showed economists forecast US GDP growth to accelerate to a 2.5 percent annualised rate in the first quarter of 2014, and reaching 3 percent by year-end. For all of 2014, the US economy is expected to grow 2.6 percent, up from 2.5 percent in the November poll and faster than the 1.7 percent forecast for the whole year.

In Europe, the Stoxx 600 Index ended the session with a 0.5 percent slide from the previous close. France’s CAC 40 gave up 0.1 percent, the UK’s FTSE 100 fell 0.2 percent, while Germany’s DAX lost 0.4 percent.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Interest Rates: Wheeler Hikes OCR To 3% On Inflationary Pressures, Eyes Kiwi

Reserve Bank governor Graeme Wheeler lifted the official cash rate for the second time in as many months, saying non-tradable inflationary pressures were "becoming apparent" in an economy that’s picking up pace and he's watching the impact of a strong kiwi dollar on import prices. More>>

ALSO:

Scoop Business: Equity Crowd Funding Carries Risks, High Failure Rate

Equity crowd funding, which became legal in New Zealand this month, comes with a high risk of failure based on figures showing existing forays into social capital have a success rate of less than 50 percent, one new entrant says. More>>

ALSO:

Scoop Business: NZ Migration Rises To 11-Year High In March

The country gained a seasonally adjusted 3,800 net new migrants in March, the most since February 2003, said Statistics New Zealand. A net 400 people left for Australia in March, down from 600 in February, according to seasonally adjusted figures. More>>

ALSO:

Hugh Pavletich: New Zealand’s Bubble Economy Is Vulnerable

The recent Forbes e-edition article by Jesse Colombo assesses the New Zealand economy “ 12 Reasons Why New Zealand's Economic Bubble Will End In Disaster ”, seems to have created quite a stir, creating extensive media coverage in New Zealand. More>>

ALSO:

Thursday Market Close: Genesis Debut Sparks Energy Rally

New Zealand stock rose after shares in the partially privatised Genesis Energy soared as much as 18 percent in its debut listing on the NZX, buoying other listed energy companies in the process. Meridian Energy, MightyRiverPower, Contact Energy and TrustPower paced gains. More>>

ALSO:

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:

Get More From Scoop

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