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

 


While you were sleeping: Fed support intact

While you were sleeping: Fed support intact

April 10 (BusinessDesk) – Wall Street rose, extending gains after the latest Federal Reserve meeting minutes eased concern that US policy makers had been planning to raise interest rates sooner than had been anticipated.

The Fed released minutes from the March 18-19 Federal Open Market Committee meeting at 2pm Washington time. Fed Chairman Janet Yellen’s comments at the end of that meeting, saying rates could rise as early as the first half of 2015, had triggered concern the central bank was becoming less accommodative.

And the FOMC minutes showed some policy makers were wary of exactly that misinterpretation by investors.

“A number of participants noted the overall upward shift since December in participants’ projections of the federal funds rate included in the March SEP [summary of economic projections], with some expressing concern that this component of the SEP could be misconstrued as indicating a move by the Committee to a less accommodative reaction function,” according to the minutes released today. “However, several participants noted that the increase in the median projection overstated the shift in the projections.”

“Most participants favoured providing an explicit indication in the statement that the new forward guidance, taken as a whole, did not imply a change in the Committee’s policy intentions, on the grounds that such an indication could help forestall misinterpretation of the new forward guidance,” the minutes showed.

In afternoon trading in New York, the Dow Jones Industrial Average added 0.97 percent, the Standard & Poor’s 500 Index rose 0.75 percent, while the Nasdaq Composite Index increased 1.36 percent. The Dow was up about 0.5 percent prior to the Fed minutes being released.

Shares of Merck and Boeing advanced, last up 2.9 percent and 2 percent respectively, propelling the Dow higher.

“People are taking solace in the idea that the Fed may be more accommodative than previously thought, for longer than previously thought," Steve Sosnick, equity-risk manager at Timber Hill/Interactive Brokers Group in Greenwich, Connecticut, told Reuters.

Two-year notes also rose as a result, pushing yields three basis points lower to 0.37 percent.

“It’s dovish for the rates market because it initially sold off because they thought participants were expecting a sooner and faster hiking cycle,” Shyam Rajan, an interest-rate strategist at Bank of America, one of 22 primary dealers that trade with the Fed, told Bloomberg News. “The fact that they are playing it down is bullish.”

There were more reasons for optimism. Shares of Alcoa rose, last up 3.4 percent, after the company reported earnings that were better than anticipated, setting a positive tone to the start of the quarterly US results season.

In Europe, the Stoxx 600 Index finished the session with a 0.4 percent increase from the previous close, as did France’s CAC 40. Germany’s DAX rose 0.2 percent, while the UK’s FTSE 100 gained 0.7 percent.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Prefu Roundup: Forecasts Revised, Surplus Intact

The National government heads into the election with its Budget surplus target broadly intact, delivering a set of economic and fiscal forecasts marginally revised from May to reflect weaker commodity prices and a lower tax take. More>>

ALSO:

Convention Centre: Major New SkyCity Hotel And Laneway For Auckland

Today SKYCITY Entertainment Group Limited revealed plans to build a new hotel and pedestrian laneway of bars, restaurants and boutique shopping on land it owns in the Nelson and Hobson Streets block, expanding the SKYCITY Entertainment Precinct. More>>

ALSO:

Igniting The Spark: Bringing The Digital Enabler To Life

Changing a name is, relatively speaking, the easy part of a re-invention. Changing a culture, getting all the ducks in a row, turning yourself inside-out to become customer-inspired is a much bigger challenge. More>>

ALSO:

Ebola And NZ: Targeted Screening At Airport But Risk Low

The risk of any cases of Ebola in New Zealand remains very low, but health and border authorities are well prepared... anyone arriving in New Zealand who in the last three weeks has visited countries affected will be screened for symptoms of the disease. More>>

ALSO:

Scoop Business: Brewer Seeking Crowd-Funding Cancels Shareholders’ Dividends

Shareholders in Renaissance Brewing company, the first business to seek equity through crowd-funding in New Zealand, have cancelled their claim on $147,000 of accumulated earnings “to make Renaissance a more attractive investment opportunity.” More>>

ALSO:

It's Spark Now:
Why Telecom Wanted To Change

New Zealand led the world when Chorus demerged from Telecom. It gave us a telecommunications industry structure where the network is completely separated from the products and services it delivers. The changes brought about a new market dynamic and it dramatically changed Telecom’s role. More>>

ALSO:

Glass Half Empty: Dairy Prices Fall To Lowest Since 2012

Dairy product prices slumped to the lowest level since October 2012 in the latest GlobalDairyTrade auction, paced by whole milk powder and cheddar. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news