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

 


While you were sleeping: Optimism returns

While you were sleeping: Optimism returns

Jan 8 (BusinessDesk) – Equities and bonds advanced as a larger-than-expected drop in the US trade deficit bolstered optimism about the accelerating pace of growth in the world’s largest economy, while a Federal Reserve official recommended maintaining a high level of stimulus.

The US trade deficit narrowed more than expected in November, shrinking 12.9 percent to US$34.3 billion, Commerce Department data showed.

"The report should dispel worries that fourth quarter growth will be really weak," Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania, told Reuters. "It may not be robust, but should set us up for even better growth this year."

Accelerating earnings growth will help boost equities this year, according to JPMorgan Chase chief US equity strategist Thomas Lee, Bloomberg News reported. After climbing 6 percent this quarter, S&P 500 profit will rise 10 percent in the second quarter, 11 percent in the third and 14 percent in the fourth, according to Lee’s estimates.

In afternoon trading in New York today, the Dow Jones Industrial Average gained 0.64 percent, while the Standard & Poor’s 500 Index rose 0.52 percent and the Nasdaq Composite Index climbed 0.77 percent.

Gains in shares of UnitedHealth Group, last up 4 percent, and those of Johnson & Johnson, last 1.9 percent stronger, led the Dow higher. Those stocks received ratings upgrades from analysts at Deutsche Bank and RBC Capital Markets respectively.

US Treasuries took heart from comments by Boston Fed President Eric Rosengren who said the central bank should ease back the pace of its bond-buying program “very gradually.”

“[L]ong-term labour markets scars, which result from a very slow recovery, lead me to believe that the Federal Reserve should remain highly accommodative and wind down our extraordinary programs only very gradually, in order to minimise the costs and risks of not returning to full employment more quickly, " Rosengren said in a speech today in Hartford.

As widely expected, the US Senate yesterday confirmed Janet Yellen’s appointment as the next Chairman of the Fed. She will succeed Ben Bernanke when his second four-year term expires on January 31.

In Europe, upbeat jobs data from Germany, the region’s largest economy, bolstered the mood. Unemployment in Germany fell more than expected in November, declining the most in almost two years.

The Stoxx 600 Index closed with a gain of 0.7 percent. The UK’s FTSE 100 advanced 0.4 percent, while both Germany’s DAX and France’s CAC 40 added 0.8 percent.

The increased optimism about the euro-zone’s economic recovery is also helping bonds, especially those of countries on the receiving end of financial bailouts.

Ireland raised 3.75 billion euros selling a 10-year bond after receiving orders of more than 14 billion euros, Bloomberg News reported, citing people familiar with the matter.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Must Sell 20 Petrol Stations: Z Cleared To Buy Caltex Assets

Z Energy is allowed to buy the Caltex and Challenge! petrol station chains but must sell 19 of its retail sites and one truck-stop, the Commerce Commission has ruled in a split decision that acknowledges possible retail price coordination between fuel retailers occurs in some regions. More>>

ALSO:

Huntly: Genesis Extends Life Of Coal-Fuelled Power Station To 2022

Genesis Energy will keep its two coal and gas-fired units at Huntly Power Station operating until 2022, having previously said they'd be closed by 2018, after wringing a high price from other electricity generators who wanted to keep them as back-up. More>>

ALSO:

Dammed If You Do: Ruataniwha Irrigation Scheme Hits Farmer Uptake Targets

Enough Hawke's Bay farmers have signed up for water from the proposed Ruataniwha Water Storage Scheme for it to go ahead as long as a cornerstone institutional capital investor can be found to back it, its regional council promoter announced. More>>

ALSO:

Reserve Bank: OCR Stays At 2.25%

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2.25 percent, in a decision traders had said could go either way, while predicting inflation will pick up as the slump in oil prices washes out of the data and capacity pressures start to build in the economy. More>>

ALSO:

Export Values Down: NZ Posts Biggest Annual Trade Deficit In 7 Years

New Zealand has recorded its biggest annual trade deficit since April 2009, reflecting weaker prices of agricultural commodities such as dairy products, beef and lamb, and increased imports of vehicles and machinery. More>>

ALSO:

Currency Events: NZ's New $5 Note Wins International Banknote Award

New Zealand’s new Brighter Money $5 note has been named Banknote of the Year in a prestigious international competition. The $5 note was awarded the IBNS Banknote of the Year title at the International Bank Note Society’s annual meeting. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news