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

 


While you were sleeping: US housing weakness

While you were sleeping: US housing weakness

June 18 (BusinessDesk) – Wall Street rose as investors eyed a two-day Federal Reserve meeting that finishes on Wednesday amid reports showing declines in both US housing starts and building permits, while consumer prices climbed the most in more than a year.

The Fed is widely expected to cut its bond-buying program by US$10 billion for a fifth straight month, lowering it to US$35 billion.

Indeed, the US real estate industry, an area of concern including for Fed Chair Janet Yellen, showed further signs of weakness. Housing starts dropped 6.5 percent to a seasonally adjusted annual pace of 1 million units, while permits to build homes weakened 6.4 percent to a pace of 991,000 units.

Separately, the consumer price index increased 0.4 percent in May, the biggest gain since February 2013. That weighed on gold prices.

“I think there was an expectation in the gold market that at some point in spring or early summer, the Fed would have slowed their monetary tapering," Adrian Day, chief executive at the Annapolis, Maryland-based Adrian Day Asset Management, told Reuters. “"But surprisingly, they've consistently cut US$10 billion each of the last four times they've met, and that's a sign to some that we might even have an earlier rate hike than thought."

In the final hour of trading in New York, the Dow Jones Industrial Average rose 0.21 percent, the Standard & Poor’s 500 Index gained 0.29 percent, while the Nasdaq Composite Index advanced 0.52 percent.

“Overall, you’re still in a market environment where the path of least resistance is up,” John Canally, an economic strategist at LPL Financial, told Bloomberg News. “Another bump tomorrow could be the [Federal Open Market Committee], although the outcome is largely already priced in.”

Gains in shares of Home Depot, up 1.7 percent, Goldman Sachs, up 1.6 percent, and JPMorgan Chase, up 1.2 percent, propelled the Dow higher.

Oil rose as fighting in Iraq continued to escalate. Brent for August settlement added 0.5 percent to US$113.49 a barrel on the ICE Futures Europe exchange.

“The Iraq situation could continue to destabilise markets, and there are a lot of unknown factors that could keep oil prices elevated," Bernard Baumohl, a managing director at the Economic Outlook Group in Princeton, New Jersey, told Reuters. “That said, valuations for stocks are not alarmingly high, and there aren't many alternatives for investors.”

In Europe, the Stoxx 600 Index finished the session with a 0.3 percent gain from the previous close. The UK’s FTSE 100 increased 0.2 percent, Germany’s DAX strengthened 0.4 percent, while France’s CAC 40 added 0.6 percent.

A report showed that German investor confidence unexpectedly slid for a sixth straight month. The ZEW Center for European Economic Research’s index of investor and analyst expectations fell to 29.8 this month, down from 33.1 in May.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Housing Policy: Auckland Densification As Popular As Ebola, English Says

Finance Minister Bill English said calls by the Reserve Bank Governor for more densification in Auckland’s housing were “about as popular in parts of Auckland as Ebola” would be. More>>

ALSO:

Crown Accounts: NZ Government Deficit Smaller Than Expected In First Half

The New Zealand government's operating deficit was smaller than expected in the first six months of the financial year, as the consumption and corporate tax take rose ahead of forecast in December, having lagged estimates in previous months. More>>

ALSO:

Fruit & Veg Crackdown: Auckland Fruit Fly Find Under Investigation

The Ministry for Primary Industries (MPI) is investigating a find of a single male Queensland fruit fly in a surveillance trap in the Auckland suburb of Grey Lynn... MPI has placed legal controls on the movement of fruit and some vegetables outside of a defined circular area which extends 1.5km from where the fly was trapped in Grey Lynn. More>>

ALSO:

Scoop Business: Westpac NZ Reaches $2.97M Swaps Settlement

Westpac Banking Corp’s New Zealand unit has agreed to pay $2.97 million in a settlement with the Commerce Commission over the way the bank sold interest rate swaps to farmers between 2005 and 2012. More>>

ALSO:

Going Dutch: Fonterra Kicks Off $144M Partnership With Dutch Cheese Maker

Fonterra Co-operative Group, the world’s largest dairy exporter, has commissioned a new dairy ingredients plant in Heerenveen, in the north of the Netherlands, its first wholly-owned and operated ingredients plant in Europe. More>>

ALSO:

Scoop Business: NZ Retail Sales Beat Estimates

New Zealand retail sales rose more than expected in the fourth quarter, led by vehicle-related transactions, food and beverages, adding to evidence that cheap credit and a growing jobs market are encouraging consumers to spend. More>>

ALSO:

Delivery Cuts Go Ahead: 'Government Money Grab' From NZ Post

"It's a money grab by the Government as the shareholder of New Zealand Post" says Postal Workers Union advocate Graeme Clarke about the changes announced by NZ Post. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

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