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

 


World Week Ahead: US earnings, Fed minutes

World Week Ahead: US earnings, Fed minutes

By Margreet Dietz

July 7 (BusinessDesk) - US Federal Reserve meeting minutes, Fed officials’ comments and the start of second-quarter earnings season will vie for the attention of investors in the coming days, as Wall Street looks to extend its record run.

Stronger-than-expected June jobs data, released last Thursday, underpinned the view that the world’s largest economy is in much better shape than some had feared after data showing it had contracted 2.9 percent in the first quarter. American employers added 288,000 jobs last month, while the jobless rate fell to 6.1 percent.

Last week, the Dow Jones Industrial Average climbed 1.3 percent, as did the Standard & Poor’s 500 Index, while the Nasdaq Composite index jumped 2.4 percent. On Thursday, the Dow rose through 17,000 points for the first time too. US markets were closed on Friday for the July 4th Independence Day holiday.

So far this year, the Dow has gained 4.2 percent while the S&P 500 has added 8.5 percent. Both ended Thursday at record closing highs. The Nasdaq has risen 8.1 percent in 2014.

The better-than-expected labour data bolstered optimism for corporate earnings. Alcoa unofficially kicks off the second-quarter earnings season on Tuesday after the close of the market. Analysts polled by Reuters are calling for earnings growth for the second quarter of 6.2 percent, and a return to double digits in the third and fourth quarters: 10.9 percent and 11.9 percent, respectively.

“The strong jobs report can translate to better earnings after a period of time but it can't be immediate," Tim Ghriskey, chief investment officer at Solaris Group in Bedford Hills, New York, told Reuters.

Even so, the flipside of the coin is that accelerating growth might prompt policy makers to start raising interest rates.

Investors will eye minutes from last month’s Federal Open Market Committee meeting, due for release on Wednesday. In June, policy makers cut bond purchases by US$10 billion for the fifth straight meeting, to US$35 billion a month, while Fed Chair Janet Yellen said the central bank still planned to keep the benchmark interest rate near zero for a “considerable time” after ending the bond-buying programme.

"The data supports expectations for the Fed to begin coaxing the Fed funds rate higher by the middle of next year," analysts at BNP Paribas wrote in a note to clients, according to Reuters. "Markets are now on alert for any change of message from the Fed in response to the better data."

Several Fed officials are scheduled to speak this week. Richmond Fed President Jeffrey Lacker will talk on the economic outlook in Charlotte, North Carolina, while Minneapolis Fed President Narayana Kocherlakota speaks on monetary policy and the economy in Minneapolis, both on Tuesday.

On Thursday, Kansas City Fed President Esther George will discuss the economy and monetary policy in Shawnee, Oklahoma, while Fed Vice Chair Stanley Fischer will speak in Cambridge, Massachusetts. On Friday, Philadelphia Fed President Charles Plosser, Chicago Fed President Charles Evans and Atlanta Fed President Dennis Lockhart will talk at the Rocky Mountain Economic Summit in Jackson Hole, Wyoming.

In terms of economic data this week, reports scheduled for release in the US include the NFIB small business optimism index, and consumer credit, due Tuesday; as well as weekly jobless claims, and wholesale trade, due Thursday

In Europe, the Stoxx 600 gained 1.8 percent last week.

The Bank of England is expected to keep its key interest rate at a record-low 0.5 percent after its meeting on Thursday. Last month, BOE Governor Mark Carney warned an increase could come earlier than markets anticipated.

Among reports due this week in Europe are German industrial production and euro-zone Sentix investor confidence, on Monday; Germany’s trade balance, the UK’s industrial and manufacturing production, on Tuesday; and Germany’s CPI, on Friday.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

SOE Results: TVNZ Lifts Annual Profit 25% On Flat Ad Revenue, Quits Igloo

Television New Zealand, the state-owned broadcaster, lifted annual profit 25 percent, ahead of forecast and despite a dip in advertising revenue, while quitting its stake in the pay-TV Igloo joint venture with Sky Network Television. More>>

ALSO:

Insurers Up For More Payouts: Chch Property Investor Wins Policy Appeal In Supreme Court

Ridgecrest NZ, a property investor, has won an appeal in the Supreme Court over insurance cover provided by IAG New Zealand for a Christchurch building damaged in four successive earthquakes. More>>

ALSO:

Other Cases:

Royal Society: Review Finds Community Water Fluoridation Safe And Effective

A review of the scientific evidence for and against the efficacy and safety of fluoridation of public water supplies has found that the levels of fluoridation used in New Zealand create no health risks and provide protection against tooth decay. More>>

ALSO:

Scoop Business: Croxley Calls Time On NZ Production In Face Of Cheap Imports

Croxley Stationery, whose stationery brands include Olympic, Warwick and Collins, plans to cease manufacturing in New Zealand because it has struggled to compete with lower-cost imports in a market where the printed word is giving way to electronic communications. More>>

ALSO:

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:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

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