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

 


World Week Ahead: Fed meets, Apple reports

World Week Ahead: Fed meets, Apple reports

Jan 27 (BusinessDesk) – The US Federal Reserve is expected to announce a further easing to its monthly bond-buying programme this week, just as equity markets were spooked by signs of slowing growth in China and a sell-off of emerging markets’ currencies last week.

China’s factory output may contract in January, a preliminary Purchasing Managers’ Index from HSBC Holdings and Markit Economics released last week showed, fuelling concern that the world’s second-largest economy is losing steam again.

Last week Argentina devalued its peso, sending it into free-fall, while other currencies including Turkey’s lira, Russia’s ruble, Ukraine’s hryvnia, and South Africa’s rand also slumped on worries about the global economy.

In the past five days, the Dow Jones Industrial Average sank 3.5 percent, the Standard & Poor’s 500 Index dropped 2.6 percent, while the Nasdaq Composite Index shed 1.7 percent.

The Dow has now fallen 4.1 percent since the start of the year, while the S&P 500 has given up 3.1 percent.

In Europe, the Stoxx 600 Index declined 3.3 percent last week. The UK’s FTSE 100 retreated 2.4 percent, while Germany’s DAX sank 3.6 percent and as France’s CAC 40 shed 3.8 percent.

All the turmoil was good for gold, reviving its appeal as a safe-haven and boosting the price by 1 percent in the past five days. US Treasuries also benefitted.

“We are back to a flight-to-quality atmosphere, given the worries from emerging markets and China,” Kevin Flanagan, a Purchase, New York-based fixed-income strategist for Morgan Stanley Smith Barney, told Bloomberg News.

The Federal Open Market Committee will start its two-day meeting on Tuesday, the last gathering before Janet Yellen succeeds Ben Bernanke as Fed Chairman, and is expected to announce another US$10 billion cut to its monthly bond-buying program, eased to U$75 billion in January.

And that’s disconcerting to investors who have grown used to the central bank stimulus.

“You have two very troubling things: uncertainty about the Fed policy, combined with concerns about growth, particularly in China,” Eamon Aghdasi, a strategist at Societe Generale in New York, told Bloomberg News.

Wal-Mart became the latest US retailer to slash staff. The company said on Friday it had cut 2,300 jobs at its Sam's Club retail warehouse chain.

US companies including Apple, Amazon, Facebook, Ford Motor, and Pfizer are scheduled to release results in the coming days.

With about a quarter of S&P 500 companies having reported earnings so far, 63.9 percent have surpassed analysts' expectations, according to Reuters.

Some believe the recent slide will prove a reason to buy.

"Ultimately, it's going to be a buying opportunity," Quincy Krosby, market strategist at Prudential Financial in Newark, told Reuters. "The market needs to figure out how much of the move has been liquidity driven and what was based on earnings."

President Barack Obama will deliver his fifth State of the Union address on Tuesday.

This week’s slew of US economic data includes the Dallas Fed manufacturing survey, due Monday; durable goods orders, S&P Case-Shiller home price index, consumer confidence, and the Richmond Fed manufacturing index, due Tuesday; gross domestic product, weekly jobless claims, and the pending home sales index, due on Thursday; and personal income and outlays, employment cost index, Chicago PMI, and consumer sentiment, due on Friday.

(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