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


While you were sleeping: Fed signals ongoing support

While you were sleeping: Fed signals ongoing support

Aug 1 (BusinessDesk) – Wall Street advanced as US Federal Reserve policy makers kept its US$85 billion a month bond-buying program intact as the economy continues to recover at a pace that requires ongoing stimulus.

"The Committee sees the downside risks to the outlook for the economy and the labour market as having diminished since the fall," policy makers said in a statement at the end of a two-day meeting while at the same time assessing economic activity as "modest" through the first-half of the year. The Fed earlier characterised the recovery as "moderate".

"The Committee recognises that inflation persistently below its 2 percent objective could pose risks to economic performance, but it anticipates that inflation will move back toward its objective over the medium term," the Fed said.

The FOMC said it decided to continue purchasing additional agency mortgage-backed securities at a pace of US$40 billion per month and longer-term Treasury securities at a pace of US$45 billion per month. It didn't indicate when it might adjust its pace of purchases.

"This is pretty much what the market wanted. The Fed will maintain its asset purchases until it sees labour market improvement, and it will maintain an accommodative policy after the purchases end," Wayne Kaufman, chief market analyst at Rockwell Securities in New York, told Reuters.

In late afternoon trading in New York, the Dow Jones Industrial Average rose 0.5 percent, the Standard & Poor's 500 Index added 0.59 percent and the Nasdaq Composite Index advanced 0.69 percent. Earlier in the session the Dow hit a record high 15,634.32.

Gains in shares of Bank of America and JPMorgan Chase led the Dow higher.

The US dollar weakened after the Fed statement, sliding 0.4 percent against the euro.

“At the margin, the statement was slightly dovish,” Donald Ellenberger, co-head of government and mortgage-backed securities at Federated Investors in Pittsburgh, told Bloomberg News. “In Fed jargon, they offered a slight downgrade to economic and inflation growth.”

US gross domestic product, climbed at a better-than-expected 1.7 percent annualised rate in the second quarter, following a 1.1 percent increase the prior quarter, according to Commerce Department data released today.

Separately, private employers added a better-than-expected 200,000 jobs in July, according to the ADP National Employment Report.

"The economy is improving and the ADP report is emblematic of a pattern of growth that will continue to tilt to the upside," Eric Green, chief economist at TD Securities in New York, told Reuters. "That is enough for the Fed to taper in September."

Shares of Herbalife received a boost, last up 9.5 percent, from a CNBC report that billionaire investor George Soros had taken a large stake in the company.

In Europe, the Stoxx 600 Index closed 0.1 percent higher than the previous close. Germany’s DAX also added 0.1 percent, while France’s CAC 40 rose 0.2 percent and the UK's FTSE 100 increased 0.8 percent. Both the Bank of England and the European Central Bank hold meetings on Thursday.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Stats NZ: Election Boosts October Job Numbers

Job numbers were boosted by general election staff in October 2020, along with rises in the manufacturing, retail, and hospitality industries, Stats NZ said today. Filled jobs rose by 27,667 to 2.2 million in October 2020 compared with September, after ... More>>

Government: New Year Border Exception For Seasonal Workers In The Horticulture And Wine Industries

2000 additional RSE workers to enter New Zealand early next year employers must pay these workers at least $22.10 an hour employers will cover costs of managed isolation for the RSE workers RSE workers will be paid the equivalent of 30 hours work a week ... More>>


Grey Power: Is Disappointed To Learn Of More Bank Closures

Many older people are being left without essential services because of cost cutting and the march of modern technology. It is now expected that most banking transactions can occur via the internet or telephone. Jan Pentecost, President of the Grey Power ... More>>


Media: Discovery, Inc. Completes Acquisition Of New Zealand’s Mediaworks TV Ltd

Auckland, New Zealand, December 1, 2020 - Discovery, Inc. (“Discovery”), the global leader in real-life entertainment, has completed its acquisition of New Zealand’s leading independent free-to-air commercial broadcaster, MediaWorks TV Ltd, now operating ... More>>

Department Of Conservation: Big Year Underway At Albatross Colony

Familiar faces are returning for the new season of Royal Cam, with a big breeding year underway for the toroa/northern royal albatross colony on Otago’s windswept Pukekura/Taiaroa Head. More than 120 albatrosses, a taonga species, have returned ... More>>

Real Estate: ASB Survey Reveals Majority Of Kiwis Expect House Prices To Keep Climbing


House price expectations are soaring as New Zealand’s housing market shifts up a gear. But stretched affordability is putting a dent in perceptions of whether it’s a good time to buy. While Kiwis reveal they do expect interest rates to fall further. ... More>>

Stats NZ: Births And Deaths: Year Ended September 2020

Births and deaths releases provide statistics on the number of births and deaths registered in New Zealand, and selected fertility and mortality rates. Key facts For the year ended September 2020: 57,753 live births and 32,670 deaths ... More>>