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

 

While you were sleeping: Mixed data and analysis

While you were sleeping: Mixed data and analysis

(BusinessDesk) September 2 - Wall Street dropped in thin trading as investors tried to make sense of the latest data on the strength and outlook for the world’s biggest economy ahead of the release of the August payrolls report tomorrow.

The Institute for Supply Management today said its index of national factory activity edged down to 50.6 from 50.9 in July. While a decline isn’t good news, it was better than expectations of a drop to 48.5.

To add to the conflicting data, US car makers reported increases in domestic sales last month that seemed to defy data showing declining consumer confidence.

Sales at Chrysler jumped by 31% from a year ago, General Motors Co posted an 18% increase and Ford Motor Co reported an 11% gain.

Still, the White House is reining its forecast for overall growth ahead of a major speech by President Barack Obama on September 8 on how he plans to bolster the economy and employment.

Under new projections, the White House said it expected gross domestic product to increase 1.7% this year, down from the 2.7% expected back in February, and 2.6% in 2012, down from a 3.6% prediction in February, according to Reuters.

“The economic outlook is still shaky, and that’s been driving the industrial metals and the energy sector lower,” Michael Banks, a London-based analyst at Hermes Commodities, told Bloomberg News. “It’s something we see continuing for the next one to three months.”

And it’s not just what’s happening in America that’s making it hard for investors to decide what to do with their money.

Data showed that euro-zone manufacturing contracted more than initially expected in August while Chinese manufacturing growth held near the lowest level in 29 months.

In late afternoon trading, the Dow Jones industrial average shed 0.59%, the Standard & Poor's 500 Index dropped 0.79% and the Nasdaq Composite Index fell 1.03%.

Analysts at UBS have reviewed the performance of the S&P 500 and they think investors have got it wrong. The analysts are seeing double-digit gains for the benchmark by the end of 2011, Reuters reported.

Excluding the current downturn, the S&P 500 has shed more than 17% 14 times since the end of World War Two, but the economy only fell into recession on nine of those occasions, equity strategists of the Swiss bank wrote in a research note published Thursday.

"Put differently, the market predicted roughly a third more recessions than actually occurred," they wrote in the report, entitled "14 of the last 9."

The S&P is trading at 11.3 times estimated earnings, below UBS's fair value estimate of 12.5 times, the report notes.

More immediately though, investors eyes are on tomorrow’s Labor Department report, which is expected to show non-farm payrolls climbed by 68,000 after a 117,000 increase in July, according to the median forecast of economists surveyed by Bloomberg News.

Goldman Sachs Group Inc economists today cut in half their expectations for job gains to 25,000, pointing to the slow pace of hiring in late July and August

In Europe, central bankers are starting to become a bit more forthright in their views on the situation in the U.S., perhaps looking to deflect criticism about how the E.U. is - is not - managing its finances.

"The crisis is not over. Not just in Europe is it not over, it is also not over in other regions of the world," European Central Bank policymaker Juergen Stark said, Reuters reported, adding the U.S. had an "enormous" debt problem and lacked the structures to get the problem under control.

Stark said there was no alternative but for countries to take painful steps to consolidate their public finances.

The key is who is willing to take those steps.

(BusinessDesk)

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Statistics New Zealand: COVID-19 Sees Record 12.2 Percent Fall In New Zealand’s Economy

Gross domestic product (GDP) fell by 12.2 percent in the June 2020 quarter, the largest quarterly fall recorded since the current series began in 1987, as the COVID-19 restrictions in place through the quarter impacted economic activity, Stats NZ said ... More>>

ALSO:

Climate: Scientists Release ‘Blueprint’ To Save Critical Ecosystems And Stabilize The Earth’s Climate

A group of scientists and experts produced the first comprehensive global-scale analysis of terrestrial areas essential for biodiversity and climate resilience, totaling 50.4% of the Earth's land. The report was published in Science Advances ... More>>

ALSO:

MPI: Independent Review Launched Into Assurances For Safe Transport Of Livestock By Sea

The Ministry for Primary Industries (MPI) has launched an independent review of the assurances it receives for the safe transport of livestock by sea. MPI Director-General Ray Smith says Mike Heron QC has been appointed to lead the review, which is expected ... More>>

ALSO:


Computers: New Zealand PC Market Grows Nearly 40% Due To Work From Home Demand

COVID-19 had large impacts on demand for PCs as businesses prepared for lockdowns by purchasing notebooks to mobilise their workforce. In the second quarter of 2020, New Zealand's Traditional PC market experienced a 39.7% year-on-year (YoY) growth ... More>>

ALSO:

Mediaworks: Reaches Agreement To Sell TV Operations To Discovery, Inc.

New Zealand’s largest independent commercial broadcaster MediaWorks and the global leader of real-life entertainment Discovery Inc. (“Discovery”) are pleased to announce they have reached a binding agreement regarding the sale of MediaWorks’ ... More>>

ALSO:

Ministry of Health: Public Transport Distancing Requirements Relaxed

Physical distancing requirements on public transport have been reviewed by the Ministry of Health to determine whether they are still required at Alert Level 2 (or below). The Ministry’s assessment is that mandatory face covering and individuals tracking ... More>>

ALSO:

NZHIA: New Zealand Hemp Industry Set To Generate $2 Billion Per Annum And Create 20,000 Jobs

A new report says a fully enabled hemp industry could generate $2 billion in income for New Zealand by 2030, while also creating thousands of new jobs. Written by industry strategist Dr Nick Marsh, the report has prompted calls from the New Zealand Hemp ... More>>

ALSO:

Stats NZ: One In 14 Employed People Report High Risk Of Losing Jobs

About one in 14 workers say they expect to lose their job or business by mid-2021, Stats NZ said today. A survey of employed people in the June 2020 quarter showed 7 percent felt there was a high or almost certain chance of losing their job or business ... More>>

ASB Quarterly Economic Forecast: NZ Economy Doing Better Than Expected, But Challenges Remain

August lockdown estimated to have shaved 8% off NZ’s weekly GDP, and 0.5% off annual GDP Economy now expected to shrink 5% (year-on-year) by end of 2020 Unemployment rate now expected to peak at 7.2% The latest ASB Quarterly Economic Forecast is less ... More>>

ALSO:

SAFE: Live Export Ship Carrying 5,800 New Zealand Cows Goes Missing In East China Sea

Livestock carrier Gulf Livestock 1 sent a distress signal at 4:45am NZT yesterday in the East China Sea. The area is affected by Typhoon Maysak. At 4pm a patrol plane spotted a lifeboat - with no people in it - and a man in lifejacket nearby. The ship ... More>>

ALSO:

FMA: Kiwisaver Fees Don't Match Performance

The Financial Markets Authority (FMA) today published an independent report into the passive and active investment management styles [i] used by KiwiSaver providers. The FMA commissioned MyFiduciary to test the extent that KiwiSaver providers were ... More>>