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

 

While you were sleeping: Fed positioning

While you were sleeping: Fed positioning

Sept. 12 (BusinessDesk) - Stocks on both sides of the Atlantic retreated amid more signs of positive US growth, which is encouraging investors to bet on a more hawkish stance on interest rates when the Federal Reserve meets next week.

In late afternoon trading in New York, the Dow Jones Industrial Average fell 0.17 percent, the Standard & Poor’s 500 Index inched 0.02 percent lower and the Nasdaq Composite Index retreated 0.20 percent.

Wall Street is trading near record highs, bolstered by the Fed’s low rates and asset purchases, with the Dow up 4.5 percent this year and the S&P 500 up 9.5 percent.

Declines in shares of Merck and those of Nike, down 1.3 and 0.8 percent respectively, led the Dow lower.

"We are in some kind of corrective phase in the stock market but it's not the end of the world," David Rosenberg, chief economist and strategist of Canadian asset manager Gluskin Sheff, told Reuters, saying that valuations are expensive but not necessarily in bubble territory.

"I think we're still in a fundamental bull market," said Rosenberg. "I see the bond market more overvalued than the stock market."

Pacific Investment Managemen’s Bill Gross told Bloomberg News that Treasury 10-year notes were “fairly valued” at 2.5 percent.

A report showed that US jobless claims unexpectedly rose 11,000 to 315,000 in the week ended September 6, which included the Labor Day holiday. That was above the 300,000 expected by economists. Still, the data was taken with a grain of salt.

“It was during Labor Day holiday, so odds are that there are some seasonal adjustment problems,” Omair Sharif, a US economist at RBS Securities in Stamford, Connecticut, told Bloomberg News. “Underlying labour demand remains very firm, and certainly that is going to help consumer spending going forward.”

Separately the US Commerce Department released quarterly services spending data which showed healthcare spending took place at a much higher rate than anticipated, leading some economists to edge higher economic growth forecasts for the second quarter.

US Federal Reserve policy makers meet next week and all eyes will be on any clues with regards to the timing of an interest rate increase. The Fed is on track to end its monthly bond-buying program, currently at US$25 billion, in October.

Meanwhile, shares of Lululemon jumped, last up 14.4 percent, after the maker of yoga apparel reported better-than-expected second-quarter results and lifted its full-year earnings forecast.

"While there is still much to be done, we are making meaningful progress on building a scalable foundation for our next phase of global growth," Laurent Potdevin, Lululemon's CEO, said in a statement.

In Europe, the Stoxx 600 ended the session with a 0.1 percent decline from the previous close, as did Germany’s DAX. France’s CAC 40 slipped 0.2 percent, while the UK’s FTSE 100 Index dropped 0.5 percent.

(BusinessDesk)

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 


Serious Fraud Office: Commences Enquiries Into Allegations Of COVID-19 Wage Subsidy Fraud
The Serious Fraud Office has commenced a number of enquiries into alleged abuse of the Government’s COVID-19 Wage Subsidy. Director Julie Read said the allegations relate to multiple complex cases of potential fraud that have been referred to the agency following extensive investigations ... More>>



Environment: Preliminary Environmental Data On New Zealand’s Air Quality Released Today

The Ministry for the Environment and Stats NZ have published the Our air 2021: preliminary data release today. We are currently working to revise the Our air 2021 report to incorporate analysis of the World Health Organization (WHO) 2021 air quality guidelines that were released on 23 September 2021... More>>


Statistics: Food Prices Rise For Sixth Consecutive Month
Food prices rose 0.5 percent in September 2021 compared with August 2021, mainly influenced by higher prices for grocery food and meat, poultry, and fish, Stats NZ said today. September’s movement is the sixth consecutive monthly rise. After adjusting for seasonality, prices rose 0.9 percent... More>>



Reserve Bank: Robust Balance Sheets Yield Faster Economic Recovery

Stronger balance sheets for households, businesses, financial institutions and the government going into the pandemic contributed towards maintaining a sound financial system and yielding a faster economic recovery than following previous deep recessions... More>>


Transpower: Releases Independent Report Into Events Of August 9
Transpower’s Chief Executive Alison Andrew has today released an independent report into the grid emergency of August 9 when insufficient generation was available to meet demand, leading to some customers being disconnected... More>>

Bayleys: Latest Lockdown Adds Further Fuel To Industrial Property Market

The recent construction shutdown resulting from Auckland’s Covid 19’s lockdown restrictions has put additional pressure on an industrial property market that is already struggling to keep pace with demand... More>>