Here's my summary of the key news overnight in 90 seconds at 9 am, including news that stocks rose in New York in early trading, as the S&P500 stock index shrugged off a 10% decline in Apple to climb above 1,500 for the first time since December 2007 on positive economic news. By mid-day some of the steam had gone out of the rally, but it is still up.
Part of the reason was the the flash PMI for the US rose to 56.1 in December and by the most in three months, and the number of new claims for jobless benefits dropped to a five-year low last week, giving surprisingly strong signals on the American economy's pulse.
In Europe, the signals were mixed. A worryingly weak PMI from France was a big negative. It came in at 42.7 and well below expectations. In Germany however, the PMI is 53.6 and the highest for a year and way above expectations. Overall euro-zone PMIs are not so good though and the separation out by Germany will be a worry.
Yesterday we reported that the Chinese PMI was stronger than analysts were expecting although only to 51.9, so manufacturing around the world seems to be expanding. Not so in New Zealand however; yesterday we reported that ours came in at 50.0, neither expanding nor contracting in December, a tiny lift from the previous month.
We saw some official rate action in Denmark overnight. They raised their benchmark interest rates for the first time since July 2011 to defend the krone’s peg to the euro after investor appetite for their government debt waned.
Finally, a couple of unrelated items:
In the US, authorities there announced they will appoint a former prosecutor to head the SEC, a clear signal of a tougher approach to corporate wrongdoing.
Japan has had a big dive in exports at the end of 2012, fuelling the calls for faster reform of the world's third largest economy.
And the smog in Beijing may trigger a surge in car sales there. Seems counterintuative perhaps but authorities are worried and they are seriously considering adopting tough European rules on emissions. That would require a rapid changeover in the passenger car fleet. Another beneficiary may be Warren Buffett, who has a big stake in a Chinese electric car maker.
The New Zealand dollar starts today having fallen overnight against the US dollar and a big fall against the yen, but rising against the Aussie and the euro. It starts today at 83.8 USc, 80.1 AUc, and all those changes all balanced out with the TWI down only marginally at 75.4.
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2 Comments
You are wrong, Im a farmer and for the 10 years up to 2007 my tax bill averaged 150k a year. I got hammered on livestock values, i paid provisional with my o/d, I paid my childrens school fees and had health ins, I also paid 36 k a year in council rates.
To say farmers don't pay tax is plain wrong, unfortunately many farmers have very high debts and pay alot of income in interest, but when the capital comes around to being re-paid they get taxed to pieces. The reason many dont pay tax is because their business model is failing and they are forced to borrow to cover living costs.
Im now living in the US and im still paying a lot of tax in NZ. The real bludgers are the huge number of overpaid state sector workers, many earn more than the 260k this man has got in his life time every year. Also those who rort the system, so that many items cost double or more what they do elsewhere in the world.
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