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

 

Half Empty: Fonterra's 2017 Opening Forecast Below Expectations

Fonterra Cooperative Group raised its forecast farmgate milk payout for next season by less than expected as the world's largest dairy exporter predicts lower prices will crimp production and supply will pick up. The New Zealand dollar fell. More>>

ALSO:

Pest Control: Mouse Blitz Team Leaves For Antipodes

The Million Dollar Mouse project to rid Antipodes Island of mice is underway with the departure of a rodent eradication team to the remote nature reserve and World Heritage Area. More>>

Gongs Got: Canon Media Awards & NZ Radio Awards Happen

Radio NZ: RNZ website The Wireless, which is co-funded by NZ On Air, was named best website, while Toby Manhire and Toby Morris won the best opinion general writing section for their weekly column on rnz.co.nz and Tess McClure won the best junior feature writer section. More>>

ALSO:

Pre-Budget: Debt Focus Risks Losing Opportunity To Stoke Economy

The Treasury is likely to upgrade its forecasts for economic growth in Budget 2016 next week but Finance Minister Bill English has already signalled that more of his focus is on debt repayment than on fiscal stimulus or tax cuts... More>>

ALSO:

Fulton Hogan's Heroes: Managing Director Nick Miller Resigns

Fulton Hogan managing director Nick Miller will leave the privately owned construction company after seven years in charge. The Dunedin-based company has kicked off a search for a replacement, and Miller will stay on at the helm until March next year, or until a successor has been appointed and a transition period completed. More>>

ALSO:

Gordon Campbell: On Electricity, Executions, And Bob Dylan

The Electricity Authority has unveiled the final version of its pricing plan for electricity transmission. This will change the way transmission prices (which comprise about 10% of the average power bill) are computed, and will add hundreds of dollars a year to power bills for many ordinary consumers. More>>

ALSO:

Half Empty: Fonterra NZ, Australia Milk Collection Drops In Season

Fonterra Cooperative Group says milk collection is down in New Zealand and Australia, its two largest markets, in the first 11 months of the season during a period of weak dairy prices. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news