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

 


World Week Ahead: Economic reality check

World Week Ahead: Economic reality check

By Margreet Dietz

Aug. 18 (BusinessDesk) - Data to be released in the US and Europe in the days ahead will go a long way to determining whether the threat to global growth will prove transitory, and give investors a green light to push stock prices ever higher.

Last week offered evidence that the American consumer may be somewhat less confident than previously believed as both retail sales and consumer confidence fell short of expectations. Even so, the positive flip side of that coin was that it bolstered hope the Fed will hold off on increasing its target interest rate.

On Friday a report showed that the Thomson Reuters/University of Michigan preliminary sentiment index dropped to 79.2, the lowest since November. And disappointing earnings from retailers including Wal-Mart and Kohl’s underscored those data.

Home Depot, Target and Lowe’s are among companies scheduled to report their latest quarterly this week.

Federal Reserve “Chair [Janet] Yellen specifically cited pessimism over household income as one of the headwinds that’s impacting the US economy right now, and these figures would seem to underscore her point,” Dana Saporta, director of US economic research at Credit Suisse in New York, told Bloomberg News.

For additional clues on the outlook for rates, investors will pour over minutes of the latest US Federal Reserve meeting in July, which will be released on Wednesday. As well, comments by policymakers at the Fed’s annual Jackson Hole, Wyoming global central bank gathering will be scrutinised more closely than ever.

Investors will also eye reports on the housing market index, due Monday, housing starts, due Tuesday, and existing home sales, due Thursday, to get a better handle on one the key areas of the US economy that has struggled to recover.

Other reports set for release in the coming days include the consumer price index, due Tuesday, and then weekly jobless claims, the preliminary PMI manufacturing index, the Philadelphia Fed survey, and leading indicators, due Thursday.

Last week, the Dow Jones Industrial Average added 0.66 percent, the Standard & Poor’s 500 Index increased 1.22 percent, while the Nasdaq Composite Index climbed 2.15 percent.

So far this season, about three-quarters of S&P 500 companies have surpassed earnings expectations.

Meanwhile, there is sufficient uncertainty about the global economic outlook to strengthen the appeal of US Treasuries. Thirty-year bonds advanced last week, pushing yields 10 basis points lower to 3.13 percent.

German 10-year bonds also rallied, with yields falling to a record low below 1 percent in part after data showed its economy contracted in the latest quarter, an ominous sign for Europe’s powerhouse.

On commodity markets, the price of oil jumped on Friday amid intensifying tension between Russia and the Ukraine. Front-month October Brent crude gained US$1.46 to settle at US$103.53 a barrel, narrowing its decline for the week to 1.7 percent, according to Reuters.

"The market is keeping an eye out for any geopolitical tensions," Carl Larry, chief executive officer at consultancy Oil Outlooks in Houston, told Reuters.

In Europe, the Stoxx 600 rallied 1.9 percent last week, as did the UK’s FTSE 100 Index. Here, the region’s top three economies, not just Germany, showed that their individual recoveries are not assured and the euro-zone economy itself unexpectedly stalled in the second quarter.

The disappointing growth data, however, has renewed hope that the European Central Bank will pull out extra measures to help stoke the area’s economic engine though it seems unlikely to do so anytime soon.

The latest data on the euro zone will arrive in the form of the trade balance, due Monday, current account, due Tuesday, German producer prices, due Wednesday, euro-zone manufacturing, services, and consumer confidence, due Thursday,

Minutes from the latest Bank of England meeting will be released on Wednesday.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Cosmetics & Pollution: Proposal To Ban Microbeads

Cosmetic products containing microbeads will be banned under a proposal announced by the Minister for the Environment today. Marine scientists have been advocating for a ban on the microplastics, which have been found to quickly enter waterways and harm marine life. More>>

ALSO:

NIWA: 2016 New Zealand’s Warmest Year On Record

Annual temperatures were above average (0.51°C to 1.20°C above the annual average) throughout the country, with very few locations observing near average temperatures (within 0.5°C of the annual average) or lower. The year 2016 was the warmest on record for New Zealand, based on NIWA’s seven-station series which begins in 1909. More>>

ALSO:

Farewell 2016: NZ Economy Flies Through 2016's Political Curveballs

Dec. 23 (BusinessDesk) - New Zealand's economy batted away some curly political curveballs of 2016 to end the year on a high note, with its twin planks of a booming construction sector and rampant tourism soon to be joined by a resurgent dairy industry. More>>

ALSO:


NZ Economy: More Growth Than Expected In 3rd Qtr

Dec. 22 (BusinessDesk) - New Zealand's economy grew at a faster pace than expected in the September quarter as a booming construction sector continued to underpin activity, spilling over into related building services, and was bolstered by tourism and transport ... More>>

  • NZ Govt - Solid growth for NZ despite fragile world economy
  • NZ Council of Trade Unions - Government needs to ensure economy raises living standards
  • KiwiRail Goes Deisel: Cans electric trains on partially electrified North Island trunkline

    Dec. 21 (BusinessDesk) – KiwiRail, the state-owned rail and freight operator, said a small fleet of electric trains on New Zealand’s North Island would be phased out over the next two years and replaced with diesel locomotives. More>>

  • KiwiRail - KiwiRail announces fleet decision on North Island line
  • Greens - Ditching electric trains massive step backwards
  • Labour - Bill English turns ‘Think Big’ into ‘Think Backwards’
  • First Union - Train drivers condemn KiwiRail’s return to “dirty diesel”
  • NZ First - KiwiRail Going Backwards for Xmas
  • NIWA: The Year's Top Science Findings

    Since 1972 NIWA has operated a Clean Air Monitoring Station at Baring Head, near Wellington... In June, Baring Head’s carbon dioxide readings officially passed 400 parts per million (ppm), a level last reached more than three million years ago. More>>

    ALSO:

    Get More From Scoop

     
     
     
     
     
     
     
     
    Business
    Search Scoop  
     
     
    Powered by Vodafone
    NZ independent news