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90 seconds at 9 am: World PMIs beat expectations but France and NZ lag; Denmark raises rates; SEC gets tough chief; Japan exports fall; NZ$1 = US$0.838, TWI - 75.4
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.
Related Topics
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.
3 Comments
"An East Coast man on the
"An East Coast man on the dole for 25 years is the longest unemployment beneficiary in the country and has been paid more than $260,000 in taxpayer money."
Haha....public suckers
I agree that's not a good
I agree that's not a good look Wolly, however it misses the bigger picture.
N.Z, like many other OECD countries gives many subsidies, welfare, tax breaks etc to many of it's citizens.
The media invariably highlights the welfare rorts, but conveniently spend way way less time on the wealth rorts. e.g. No capital gains tax on land.
So the very wealthy own huge amounts of land, not only farms but land banks etc. This way they pay less tax than most of the poor on PAYE (pay as you earn). re: Warren Buffets story of paying less tax than his secretary.
I thus feel we're being conned by the media and their (wealthy) financial backers into missing the elephant in the room and thus we squable over crumbs whilst the seriously wealthy feast at the table laughing at our stupidity.
What does the average farmer pay in tax per year and how much tax does he pay when he sells the farm. Bugger all. And he ruins the quality of the land and surrounding water to boot.
How many 'dole bluggers' could be paid to sit on the dole for say 25 years, if the recent John Key top end tax cuts were reversed for say 5 years.
Same scenario but a Tobin tax was impossed on currency trades, playing-toying with the NZ$.
Or Google, Starbucks, and other major companies were to pay an honest rate of nett tax.
The list could go on.
To me this is a bit like getting incredibly upset over a child breaking a window, or loud music at night, but ignoring the people in the same street who (through-at work) are ripping off the pension plans, putting this country into so much state debt, that future Kiwis will be debt slaves and or serfs in their own country, to the billionaires being allowed and ENCOURAGED by National to buy this country up, with tax breaks from us all.
You are wrong, Im a farmer
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.