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


While you were sleeping: Meagre earnings outlook

While you were sleeping: Meagre earnings outlook

Jan 22 (BusinessDesk) – After a long weekend, Wall Street returned with a sombre mood as the earnings outlook from companies including Johnson & Johnson and Verizon failed to justify current valuations.

Shares of Johnson & Johnson dropped, last 2 percent weaker, after its earnings outlook fell short of expectations.

The outlook reflects “some level of conservatism—in line with historical guidance—given still seemingly weak though potentially stabilising MedTech utilisation trends,” Danielle Antalffy, an analyst at Boston-based Leerink Partners, said in a note today, Bloomberg News reported.

In afternoon trading in New York, the Dow Jones Industrial Average fell 0.43 percent and the Standard & Poor’s 500 Index was up 0.08 percent. The Nasdaq Composite Index advanced 0.43 percent. US markets were closed on Monday for the Martin Luther King holiday.

Slides in shares of Verizon Communications, last down 2.7 percent, and those of Goldman Sachs, last down 2.6 percent, propelled the Dow lower.

“In the short term, continued earnings growth is particularly important,” James Gaul, a portfolio manager at Boston Advisors, told Bloomberg News. “We are no longer cheap, perhaps not even fairly valued at this point. Investor sentiment is quite optimistic. We need some positive news to get us going.”

Shares of Alcoa climbed, last up 7.2 percent to US$12.18. JP Morgan upgraded the stock to an "overweight" from a neutral" rating and boosted its price target to US$15 from US$9 per share.

The International Monetary Fund lifted its estimate for global growth this year, predicting the economy will expand 3.7 percent, up from an October estimate of 3.6 percent, and accelerate to 3.9 percent in 2015, according to its latest World Economic Outlook, released today.

Even so, the IMF also warns central banks including the US Federal Reserve against “prematurely withdrawing monetary policy accommodation.”

“Strengthening global growth does not mean that the global economy is out of the woods,” the IMF said in a statement. “Output gaps are still large while inflation is low, and that fiscal consolidation will continue. The WEO Update warns of underestimating the need for stronger growth, as more balance sheet repair after the crisis is still required.”

Separately, the annual PricewaterhouseCoopers survey of more than 1,300 CEOs showed 39 percent were "very confident" their company's revenues would grow in 2014, up from 36 percent a year ago, according to Reuters. Some 44 percent expect the global economy will improve in the next 12 months, compared with 18 percent a year ago.

Europe’s Stoxx 600 Index finished the session nearly 0.1 percent higher than the previous close, as did France’s CAC 40. Germany’s DAX added 0.2 percent. The UK’s FTSE 100 inched less than 0.1 percent lower.

In Germany, investor confidence took a surprise tumble in January. The ZEW Center for European Economic Research said its index of investor and analyst expectations slid to 61.7 this month, down from 62 in December.

However, the IMF is more optimistic about the euro zone’s outlook in its World Economic Outlook, predicting growth will strengthen to 1 percent in 2014 and 1.4 percent in 2015.

“The euro area is turning the corner from recession to recovery,” the IMF said in a statement.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Welcome Home: Record High Migration Stokes 41-Year High Population Growth

New Zealand annual net migration hit a new high in October as more people arrived from than departed for Australia for the first time in more than 20 years. More>>


Citizens' Advice Bureau: Report Shows Desperate Housing Situation Throughout NZ

CAB's in-depth analysis of over 2000 client enquiries about emergency accommodation shows vulnerable families, pregnant women and children living in cars and garages, even after seeking assistance from the Ministry of Social Development and Housing New Zealand. More>>


Speaking For The Bees: Greens Call For Neonicotinoid Pesticide Ban

The National Government should ban the use of controversial pesticides called neonicotinoids after evidence has revealed that even at low doses they cause harm to bee populations, the Green Party said today. More>>


Science Awards: NZAS Celebrate NZ Scientific Achievements

The Marsden Medal is awarded for a lifetime of outstanding service to the cause or profession of science, in recognition of service rendered to the cause or profession of science in the widest connotation of the phrase. This year’s medal is awarded to Dr Mike Andrews. More>>


Court Rules: Affco 'Unlawfully' Locked Out Meat Workers

The note says the full court found for the plaintiffs, "that is that the defendant locked out the second plaintiffs unlawfully and that it breached s 32 of the Act by acting otherwise than in good faith towards the plaintiffs while collective bargaining was still going on." More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news