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


World Week Ahead: Yellen sworn in, US jobs

World Week Ahead: Yellen sworn in, US jobs

Feb. 3 (BusinessDesk) – Janet Yellen starts her first week as US Federal Reserve chairman, succeeding Ben Bernanke, as she is sworn into office on Monday at a time when the domestic economy looks in decent shape but China’s is showing signs of crumbling.

The latest US employment data due in the coming days will provide further clues as to whether policy makers, now under Yellen’s stewardship whose appointment began on February 1, will feel compelled to continue cutting their stimulus in US$10 billion increments per FOMC meeting, as is expected.

The Fed last week said it would cut its monthly bond purchases by another US$10 billion, as had been widely anticipated, and following a similar cut announced at its December meeting. The latest downgrade reduced the program to US$65 billion.

The ADP employment report is due on Wednesday, followed by weekly jobless claims on Thursday, and the all-important non-farm payrolls report for January on Friday. The latter is expected to show the unemployment rate held steady at a five-year low of 6.7 percent as companies added more than double the measly 74,000 jobs they did in December.

Wall Street posted a loss for the first month of 2013. In January the Dow Jones Industrial Average shed 5.3 percent, while the Standard & Poor’s 500 Index dropped 3.6 percent, and the Nasdaq Composite Index slid 1.7 percent.

Last week did not help. In the past five days, the Dow lost 1.1 percent while the S&P 500 gave up 0.4 percent against a backdrop of a slide in equities and currencies of emerging markets amid signs of slowing growth in China. Both the greenback and US Treasuries benefitted.

"China has now become the second-largest economy in the world with a GDP that is more than half that of the US and since 2008 has functioned as the engine of global growth," Robbert Van Batenburg, director of market strategy at Newedge USA in New York, told Reuters. "If this escalates into a credit crisis that causes Chinese economic growth to come to an abrupt stop, it will impact almost every nook and cranny of the global economy."

Still, few expect an escalation at this stage.

“That we didn’t really get even an acknowledgment of the selloff in emerging markets by the Fed shows that it sees little risk of contagion at this point,” Omer Esiner, chief market analyst in Washington at the currency brokerage Commonwealth Foreign Exchange, told Bloomberg News.

Closer to home, there was reason for caution. Apple and Amazon were among American companies reporting earnings that disappointed, their shares slumping about 8 percent each for the week.

But there was evidence of bright outlooks too. Facebook was among those reporting upbeat outlooks, boosting its shares by 15 percent.

With half of the S&P 500 companies having reported earnings so far, almost 70 percent have topped earnings expectations, while two-thirds have surpassed estimates on revenue, according to Thomson Reuters data.

The coming days will bring earnings reports from Walt Disney, General Motors, Merck, UBS, Credit Suisse, and Twitter.

Other US economic data this week will arrive in the form of motor vehicle sales, the PMI manufacturing index, ISM manufacturing index, and construction spending, on Monday; factory orders, on Tuesday; the ISM non-manufacturing index, on Wednesday; and consumer credit, on Friday.

In Europe, the Stoxx 600 Index dropped 0.7 percent last week, bringing its decline for the month of January to 1.8 percent.

Policy-making committees of the European Central Bank and the Bank of England gather this week, though neither is expected to announce an adjustment to their record low interest rates.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Trade: NZ Trade Deficit Widens To A Record In September

Oct. 27 (BusinessDesk) - New Zealand's monthly trade deficit widened to a record in September as meat exports dropped to their lowest level in more than three years. More>>


Animal Welfare: Cruel Practices Condemned By DairyNZ Chief

DairyNZ chief executive Tim Mackle says cruel and illegal practices are not in any way condoned or accepted by the industry as part of dairy farming.

Tim says the video released today by Farmwatch shows some footage of transport companies and their workers, as well as some unacceptable behaviour by farmers of dragging calves. More>>


Postnatal Depression: 'The Thief That Steals Motherhood' - Alison McCulloch

Post-natal depression is a sly and cruel illness, described by one expert as ‘the thief that steals motherhood’, it creeps up on its victims, hiding behind the stress and exhaustion of being a new parent, catching many women unaware and unprepared. More>>


DIY: Kiwi Ingenuity And Masking Tape Saves Chick

Kiwi ingenuity and masking tape has saved a Kiwi chick after its egg was badly damaged endangering the chick's life. The egg was delivered to Kiwi Encounter at Rainbow Springs in Rotorua 14 days ago by a DOC worker with a large hole in its shell and against all odds has just successfully hatched. More>>


International Trade: Key To Lead Mission To India; ASEAN FTA Review Announced

Prime Minister John Key will lead a trade delegation to India next week, saying the pursuit of a free trade agreement with the protectionist giant is "the primary reason we're going" but playing down the likelihood of early progress. More>>



MYOB: Digital Signatures Go Live

From today, Inland Revenue will begin accepting “digital signatures”, saving businesses and their accountants a huge amount of administration time and further reducing the need for pen and paper in the workplace. More>>

Oil Searches: Norway's Statoil Quits Reinga Basin

Statoil, the Norwegian state-owned oil company, has given up oil and gas exploration in Northland's Reinga Basin, saying the probably of a find was 'too low'. More>>


Modern Living: Auckland Development Blowouts Reminiscent Of Run Up To GFC

The collapse of property developments in Auckland is "almost groundhog day" to the run-up of the global financial crisis in 2007/2008 as banks refuse to fund projects due to blowouts in construction and labour costs, says John Kensington, the author of KPMG's Financial Institutions Performance Survey. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news