Here's my summary of the key news overnight in 90 seconds at 9 am, including news that equities continued their march higher to start the week, shrugging off weakness in European markets and downbeat economic data in China.
The S&P500 is within reach of its all-time 2007 high in mid-day trade, and the Dow is at another all-time record.
In Europe, French industrial production fell more than expected in January as Europe’s second-largest economy teetered on the brink of its third recession in four years.
But Germany shows some spark; German imports rebounded strongly in January, up 3.3%, suggesting that domestic demand in the country may be set to recover after their Q4 downturn. And German exports also rose on demand from the US and China.
Tensions in Korea need to be kept in mind. North Korea cut off a phone hot line to the South and "declared invalid" the War armistice as the South and the US armies began a second phase of their annual joint winter exercises.
Today we are expecting to get the REINZ results for February. Even more important though is the weather outlook, and the latest forecast has pushed back the prospect of rain at the weekend even further.
The kiwi dollar starts the week slightly lower against most currencies at 82.5 USc, at 80.5 AUc, and the TWI is at 76.2.
No chart with that title exists.
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Hydro lake storage levels are falling rapidly towards 1992 drought levels and wholesale power prices are getting "ridiculously" high according to one market watcher, after little rain for two months.
The February rainfall into Lake Te Anau in the South Island was the lowest since records began 80 years ago, Meridian Energy said yesterday.
http://www.stuff.co.nz/business/industries/8410943/From-brimful-to-drou…
W.R.T. this stock market exuberance , one needs to look at history and the double dip between 1929 to 1932, to understand the dangers
One hopes that people have seen Michael Coote's Ferris- Wheel Theory (Michael Coote of the NBR ) which , for me , explains why money is flowing into equities when yields in other asset classes are close to zero . One hopes the ferris wheel does not stop suddenly or God forbid go into reverse
Having said that , I am also feeling this exuberance, and quite happy to start re-entering the equity market after taking a 3 year buying breather .
Yesterday , I registered my interest in the Mighty River Power listing and will invest my savings from ANZ ,( who are ripping me off )
Its a gamble , but slightly better than Sky City
Normally a float like MRP would be a no brainer, get in at the start and grab as many as you can. A few things concern me with this one.
* There is a growing awareness that they have been price gauging for years. Their pretext that large price increases were necessary to fund capital expenditure for future generation expansion is almost laughable. Imagine a player in a truly competive market saying "We'll be increasing the price of Big Macs or whatever by 15% because we want to revamp all our stores." Could be very hard to maintain current gross margins.
*$250 million invested in Chile?! Shivers down spine stuff. Remember how Teresa was going to show the Aussies how to make money from phones. Trying hard to think of one such junket fest thhat didn't end in tears.
* Community solar initiatives are going to take off. Whole neighourhoods bringing in container loads of panels and tubes and putting out group installation to tender. Already happening - great for neighhood bonding, social media and Alibaba make it a breeze..
My guess is the offer will be hugely over subscribed, stags will make a nice little return for their trouble and the rest will have a safe but unspectacular long term return that struggles to beat the NZX 50.
Not to mention some of the over-hype parallels with Facebook;
http://www.reuters.com/article/2013/01/31/us-facebook-shares-idUSBRE90U0NK20130131
Facebook stock has lost more than a quarter of its value since its botched debut in May.
Sure thing - yeah right.
Why not install a 5KW On-Grid (No batteris) solar system, must be better investment than MRP and ANZ.
No Gamble... unless the sun goes out or meridian/Contact stop buying the power which is highly unlikely.
Germany has "half" the worlds solar panels in place as the Govt backed a 20 year guarenteed purchase of the Elec Produced at a good rate! but then those germans are smart and we have er... well nuff said!
Yup that's what I'll be doing when/if I get back to my kiwi lifestyle block. There is so much energy on our planet that it's nothing more than capitalism gone wrong that we pay astronomical amounts for it - it should be cheaper than water.
I was off-grid once, and man it felt good. The battery cost is prohibitive, but I'll go back to grid tie-in and as long as someone pays me *something* for the excess I produce then I'll be happy.
As for NZ not being as smart as Germany; well it's embarassing really. NZ used to be the land of the number 8 wire mentality, now the USA/Australia/China say 'Jump jump' and you jump.
Years ago I wrote to Jim Anderton asking why NZ doesn't provide some tax incentive like the UK does to get a car assembly industry going (again) in NZ - we have a skilled labour force, our dollar was half the $US at the time, and it would not only help the balance of trade deficit but if we could make it easier for car companies to want to tool up to produce EVs (still languishing on automotive stage) then we could all benefit from driving cheaper EVs therefore reducing our imports of oil etc etc.
Jims reply - we don't do subsidies.
The future for NZ is to be China's farm, nothing more, at the rate you are getting left behind the rest of the world.
Looking forward to those REINZ results. The Christchurch market has gone mad.
Most houses seem to be selling $150 or more above their old 2007 valuations. One property in Harewood GV of $460k sold for $780k. It was apparently 147m sq. (Sorry can't find that little 2 button anywhere on this new laptop). Seems to be a bit of a frenzy buying at the moment.
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