Here's our summary of key overnight news in 90 seconds at 9 am, led by news that surprising jobs data in the United States overnight has led to further frenzied speculation that the US Federal Reserve may soon start to cut back on its expansionary bond buying programme.
The number of claims for jobless benefits dropped by 15,000 to 320,000 in the week ended August 10, which is the least since October 2007.
Other figures showed consumer confidence hovered near a five-year high last week, while inflation and manufacturing figures also released were about in line with expectation. But all this sent stocks tumbling by the most since June - not helped by disappointing forecasts from Cisco and Wal-Mart.
The Standard & Poor’s 500 Index and Dow Jones Industrial Average were both down as much as 1.4%.
In Europe Britain’s retail sales rose a more than expected 1.1%, excluding fuel, in July as a heatwave sent people running for food and alcoholic refreshment.
But the market couldn’t beat those US taper blues, with European stocks dropping the most in more than five weeks.
In signs of a Korean thaw, North Korea has reached an agreement with the South that aims to reopen the jointly operated Gaeseong industrial complex.
The complex was closed in April in the wake of ructions over the North’s nuclear programme.
And in things financial, the world’s biggest PC maker Lenovo beat forecasts with a 23% first quarter climb in net income to $173.9 million American dollars.
Also, the world’s biggest phone company by users China Mobile posted a 2.5% climb in second- quarter earnings.
Oil, gold and silver prices have rallied overnight, while the New Zealand dollar is up against the US and Australian currencies, but down slightly at 75.79 on the trade weighted index.
Locally not too much to look out for today, although banking giant ANZ’s giving a trading update.
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11 Comments
I hope the industry lives up to the hype and Chinese domination of panel supply has not come at the cost of quality.
http://www.nytimes.com/2013/05/29/business/energy-environment/solar-pow…
A Stunning 60% Of All Home Purchases Are "Cash Only" - A 200% Jump In Five Years - in the US, according to Goldman Sachs
Why would NZ be any different?
Stephen Hulme: Thats an interesting find in the link above. I have no idea of the numbers but it does sound very familiar here. What is very interesting is the jump rather than just the actual % rise.
The reasons they pose also sound familiar here. Although in USA speak. As below.
"Our personal thoughts: just like the stock market has been levitating on zero volume and virtually no broad distribution, so the entire housing market appears to have morphed into a "flip that house" investment vehicle used by the usual suspects (wealthy foreign oligarchs abusing the NAR's anti-money laundering exemption to park their stolen funds in the US, government sponsored firms such as BlackStone using near zero cost REO-to-Rent subsidies, and other 0.01%-ers) who piggyback on cash flows deriving from alternative cheap credit-funded investments and translate their profits into real-estate investments."
a few reasons why, they have whole areas where credit criteria is so tight given colapsed property values, cash is the only viable option i.e Las Vegas, hard to buy via finance.
The US has more international investors than here plus the venture capital firms buying up.
Know a few kiwi thats have off loaded 5-140 properties in one transaction..all cash based with the venture capital firms.
New Zealand is about 40% (ish) of the value of the market in sales (which is not quite the same as number of houses) in 2011 by my estimates, but that is a eyeball esitmation.
We know details about mortgages and household debt, we know details about the value of the housing market and house prices, the difference between the two (though not directly reported on) is the cash/offshore capital market. The trend peaked in 2007, has been up and down for the past 5 years, and looks to be heading up again. It is already enough to be driving market prices (since 2007 the Trade Weighted Index is a better predictor of house prices than locally based measures).
Interesting point on the TWI dh. Looks just past a peak in those terms, at all time high at that. There is going to be some serious some pain ahead, although with QE it might push a little higher just yet.
I should prehaps clarify my throw away remark like this: Before 2002 New Zealand household debt was an extraordinary good predictor of house prices, and the TWI was a pretty bad one. After 2007 New Zealand household debt is completely useless as a predictor of house prices, while the TWI is still a pretty bad one. So all I meant was the TWI is better than internal measures, not that it is any good.
I'd like to have a look at the balance of trade figures in this light, but www.stats.govt.nz is not repsonding from where I am at the moment.
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