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


World Week Ahead: Amazon, GDP, new Fed chair

World Week Ahead: Amazon, GDP, new Fed chair

By Margreet Dietz

Oct 23 (BusinessDesk) - A slew of US corporate earnings including from Amazon and a report on the country’s third-quarter gross domestic product will set the tone this week, while some expect the European Central Bank to announce a tapering of its asset purchase program.

Investors also will keep a close eye on fresh clues about President Donald Trump’s choice for the next Federal Reserve chair when Janet Yellen’s term ends in February. He is considering Fed Governor Jerome Powell and Stanford University economist John Taylor, while Yellen also remains in the running.

“Most people are saying it’s down to two—Mr. Taylor and Mr. Powell. I also met with Janet Yellen, who I like a lot, I really like her a lot,” Trump told Fox Business Network in an interview to be broadcast on Sunday and Monday, Bloomberg reported. “So I have three people that I’m looking at, and there are a couple of others. I’d say I will make my decision very shortly.”

Wall Street has its own favourite.

“Powell would follow very close to Yellen and would be a great choice for the market,” Paul Zemsky, chief investment officer, Multi-Asset Strategies and Solutions at Voya Investment Management in New York, told Reuters.

“Taylor would be a negative surprise for the stock market,” Zemsky noted. “Applying rules-based policy would bring closer the risk of a recession before the economic expansion plays out entirely.”

On Friday, the Dow Jones Industrial Average, the Standard & Poor’s 500 Index and the Nasdaq Composite Index closed at record highs amid optimism that Trump moved a step closer to delivering his promised tax cuts.

US Treasuries slid, sending yields on the 10-year note six basis points higher to 2.38 percent, a three-month high, according to Bloomberg.

For the week, the Dow rallied 2 percent, the S&P 500 climbed 0.9 percent, while the Nasdaq added 0.4 percent.

“A lot of the storyline we have been talking about this year is now playing out,” Mike Wilson, Morgan Stanley’s chief US equity strategist, told Bloomberg. “We’re going to have a good quarter of earnings again, we now are getting closer to the Fed chair certainty. We have the budget resolution, which is a big step in the direction of tax cuts.”

Besides Amazon, Alphabet, Microsoft, Intel and McDonald’s are also among those set to report their latest quarterly earnings this week.

More than 70 percent of the 88 S&P 500 companies that reported so far have exceeded profit expectations, according to Reuters.

The latest US economic data to be released in the coming days include reports on the Chicago Fed national activity index, due today; PMI composite, and Richmond Fed manufacturing index, due Tuesday; durable goods orders, FHFA house price index, and new home sales, due Wednesday; international trade in goods, weekly jobless claims, pending home sales index, and Kansas City Fed manufacturing index, due Thursday; as well as GDP and consumer sentiment, due Friday.

In Europe, the Stoxx 600 Index ended Friday with a 0.3 percent gain from the previous day’s close.

While the European Central Bank is not expected to announce a change in interest rates following its meeting on Thursday, some analysts expect the central bank to announce a reduction in the pace of its asset purchases.

TD Securities said it expects the ECB to announce a halving of its current asset buys to 30 billion euros a month, for 12 months.

"As we’ve had a bit more clarity on the pace versus duration debate from key ECB members recently, we now think that the ECB is likely to cut the pace of QE a bit faster and focus instead on the duration of purchases,” TD Securities said in a note.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Mycoplasma Bovis: More Properties Positive

One of the latest infected properties is in the Hastings district, the other three are within a farming enterprise in Winton. The suspect property is near Ashburton. More>>


Manawatū Gorge Alternative: More Work Needed To Choose Route

“We are currently working closely and in partnership with local councils and other stakeholders to make the right long-term decision. It’s vital we have strong support on the new route as it will represent a very significant long-term investment and it will need to serve the region and the country for decades to come.” More>>


RBNZ: Super Fund Chief To Be New Reserve Bank Governor

Adrian Orr has been appointed as Reserve Bank Governor effective from 27 March 2018, Finance Minister Grant Robertson says. More>>


ScoopPro: Helping PR Professionals Get More Out Of Scoop has been a fixture of New Zealand’s news and Public Relations infrastructure for over 18 years. However, without the financial assistance of those using Scoop in a professional context in key sectors such as Public Relations and media, Scoop will not be able to continue this service... More>>

Insurance: 2017 Worst Year On Record For Weather-Related Losses

The Insurance Council of New Zealand (ICNZ) announced today that 2017 has been the most expensive year on record for weather-related losses, with a total insured-losses value of more than $242 million. More>>