Here's my summary of the key news overnight in 90 seconds at 9 am, including news that is generally upbeat around the world.
There has been a bigger than normal set of US data released overnight and most of it was positive. Durable goods orders were up more than expected in April, consumer confidence is up in May. The Case-Shiller house price index rose as expected by a modest amount, and the US services PMI came in better than expected, a two year high.
Two regional Fed surveys of manufacturing however came in lower than expected but were still quite positive..
On the back of this the S&P500 climbed to an all-time high above the 1900 mark for the first time.
Gold has fallen sharply this morning and is currently down US$25/oz to US$1,267/oz in late New York trade. That's its lowest level in four months.
In related news and a sign that London may wane as a centre for gold trading, China has approached foreign banks and gold producers to participate in a global gold exchange in Shanghai.
China has also announced that it will remove five million old cars that do not meet exhaust emission standards by the end of this year in order to improve air quality. That may be a subtle signal for expanded stimulus in addition to being an air quality measure. It also said it will increase subsidies for basic medical coverage, in a move to help the poor and in turn stimulate consumption.
The Chinese President is publicly promoting his reform agenda and 'free markets' and this is taken to mean they will tolerate some sharp bumps as some major adjustments are made.
Fonterra as announced overnight that it has restructured its DPA partnership in South America with Nestle. It has taken a majority ownership position in Brazil and Venezuela while giving up interests in a milk powder operation, and in Ecuador. It's the first change in their 10 year partnership in the region. Fonterra says it is worth an extra NZ$96 million to them next year.
Fonterra will announce its latest New Zealand payout details this morning.
The oil price is unchanged today and benchmark UST 10 yr bond yields fell in New York trading and are now at 2.53%.
On the exchange rate, we start today with the NZ dollar slightly lower at 85.4 USc, at 92.3 AUc and the TWI is now at 79.8.
If you want to catch up with all the changes yesterday, we have an update here.
The easiest place to stay up with today's event risk is by following our Economic Calendar here »
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3 Comments
It does not take much analysis to see that these bell ringers do not represent sustainable prosperity unfolding across the land. For example, around 1990 real median income was $56k per household and now, 25 years later, its just $51k—-meaning that main street living standards have plunged by about 9% during the last quarter century. But what has not dropped is their opportunity to drop shopping: square footage per capita during the same period more than doubled, rising from 19 square feet per capita at the earlier date to 47 at present.
This complete contradiction—declining real living standards and soaring investment in retail space—did not occur due to some embedded irrational impulse in America to speculate in real estate, or because capitalism has an inherent tendency to go off the deep-end. The fact that in equally “prosperous” Germany today there is only 12 square feet of retail space per capita is an obvious tip-off, and this is not a teutonic aberration. America’s prize-winning number of 47 square feet of retail space per capita is 3-8X higher than anywhere else in the developed world!
http://davidstockmanscontracorner.com/bad-trend-breaking-retail-results…
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