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

 

Watch This Space: Mahia Rocket Lab Launch Site Officially Opened

Economic Development Minster Steven Joyce today opened New Zealand’s first orbital launch site, Rocket Lab Launch Complex 1, on the Mahia Peninsula on the North Island’s east coast. More>>

Earlier:

Marketing Rocks!
Ig Nobel Award Winners Assess The Personality Of Rocks

A Massey University marketing lecturer has received the 2016 Ig Nobel Prize for economics for a research project that asked university students to describe the “brand personalities” of three rocks. More>>

ALSO:

Nurofen Promotion: Reckitt Benckiser To Plead Guilty To Misleading Ads

Reckitt Benckiser (New Zealand) intends to plead guilty to charges of misleading consumers over the way it promoted a range of Nurofen products, the Commerce Commission says. More>>

ALSO:

Half A Billion Accounts, Including Xtra: Yahoo Confirms Huge Data Breach

The account information may have included names, email addresses, telephone numbers, dates of birth, hashed passwords (the vast majority with bcrypt) and, in some cases, encrypted or unencrypted security questions and answers. More>>

ALSO:

Rural Branches: Westpac To Close 19 Branches, ANZ Looks At 7

Westpac confirms it will close nineteen branches across the country; ANZ closes its Ngaruawahia branch and is consulting on plans to close six more branches; The bank workers union says many of its members are nervous about their futures and asking ... More>>

Interest Rates: RBNZ's Wheeler Keeps OCR At 2%

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2 percent and said more easing will be needed to get inflation back within the target band. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news