90 seconds at 9 am with BNZ

90 seconds at 9 am with BNZ: US GDP growth softens; Gold, Silver hit record highs on money printing fear; Shock Goodman Fielder warning; Wedding bad for UK economy

29th Apr 11, 8:49am by Bernard Hickey

Bernard Hickey details the key news overnight in 90 seconds at 9 am in association with Bank of New Zealand, including news that US GDP growth slowed in the first quarter to an annual rate of 1.8% from 3.1% in the fourth quarter of last year.

Higher petrol and food prices depressed consumption and bad weather reduced new construction in the world's largest economy. See more at WSJ on the weaker growth.

Despite that news of slowing growth and of higher US jobless claims, the Dow and the S&P 500 stock indices rose around 0.5%.

Confirmation from US Federal Reserve Chairman Ben Bernanke that he will keep interest rates at almost zero for some time to come encouraged investors to buy stocks and other riskier assets to get higher returns than zero in the bank. Also, news of takeovers funded by cheap borrowing boosted stocks. See more at Bloomberg on rising stocks.

However, fears of continued low interest rates and money printing increased demand for 'inflation-proof' assets such as gold and silver, which both hit record highs overnight. Silver neared a record US$50/oz, while gold hit US$1,538/oz. See more on record gold and silver prices at Reuters.

The New Zealand and Australian dollars benefited from this fresh talk about low interest rates in the United States, fueling more demand for assets in countries with higher interest rates and exposure to commodity prices.

The New Zealand rebounded this morning to over 80 USc, having fallen yesterday in the wake of the Reserve Bank's dovish comments when it left the Official Cash Rate on hold. See our earlier article on the RBNZ's decision. The Australian dollar rose over US$1.09.

Meanwhile, Australasia's biggest consumer food products group, Goodman Fielder, issued a surprise profit warning yesterday. Goodman Fielder owns the Vogels, Meadowfresh and Edmonds range of food products, among many others.

It said higher commodity prices and an inability to push prices higher when dealing with intransigent supermarket groups Woolworths and Coles Myer would push its annual profit lower. See more at The Australian on Goodman's profit warning.

Finally, the Royal Wedding may actually reduce British GDP because the national holiday declared for the day is expected to reduce productivity. See more here at the LA Times.

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21 Comments

by Kunst | 29th Apr 11, 9:09am 1304024953

Preparing for tougher times.

We need more “NZfarmers Markets” in this country, where NZcommunities are allowed to buy directly from NZfarmers and NZsuppliers – competing with foreign super markets chains.

Bring NZcommunities together !

by Elley | 29th Apr 11, 9:58am 1304027896

It's not just a matter of "more" farmers Markets, it's a matter of "better" farmers Markets. Everybody was telling us about our local one before we moved, so we went once. What a bitter disappointment. Three or four stalls selling a handful of fruit & veggies, at least as expensive or more expensive than at the local SuperValue (which itself is dearer than larger supermarkets). Haven't been again since (fruit & veg specialist shops are much better value for money and offer heaps more choice).

But like you, I'd love to see Farmers Markets take off. Markets are probably one of the few things I miss from home. Just loved going every Saturday morning and you could find everything, from fresh food (not just fruit & veggies, also meat, fish, wine, cheese etc) to clothes, gifts etc for a fraction of the price. And the atmosphere was great too (and you could spend 2 hours there and still not see half of it). Feeling rather nostalgic now!

by We Are Stuffed | 29th Apr 11, 10:09am 1304028596

Besides the farmers markets being no cheaper Elley, I need to get up at sparrow fart 6am to buy there.

At least the supermarkets are open 24/7.

It's a shame the stall holders are so greedy though.

by Amanda Morrall | 29th Apr 11, 12:15pm 1304036105

Nah, you've stuffed up. Takapuna Sunday market open till noon. You can still sleep-in and go bananas at the stalls. Maybe slimmer pickings but you time it right and you'll get in on the discounting that takes place toward the end. Watch for me. I could be there slogging Montreal-style bagels soon.

by KW John | 29th Apr 11, 1:57pm 1304042221

Anything like Ridley Road Bagels? - things one misses... (couldn't get a coffee though!)

by Gertraud T. | 29th Apr 11, 10:39am 1304030397

Elley - agree, I also bemoan the fact there are no real markets like back home, I cannot understand why?

One reason might be that the fees for a stall are too high for a small private grower. A few years ago a lived in an area with glorious soil and had a very productive vegetable garden. I gave away cucumbers to the neighbors banana boxes full, also plenty of french butter beans etc., they just could not use all the glory anymore, so I thought go to the weekly market in town. Surprise, smallest table did cost $ 40,- (charged by council for a council parking lot made available) and I would have to drive 40 km both ways, so it just was not worth it. In the end I did put banana boxes full at the nearest garage "free to a good home" to avoid wasting the goods.

To encourage farmers markets the council should really only charge a minimal token fee for space.

by Trolleyboy | 29th Apr 11, 12:03pm 1304035390

There's an excellent farmer's market in Dunedin. When it opened a few years ago, the vegetable auctioneers threatened to blacklist any growers who sold there. Ah, capitalism.

by Ahuhyeah | 29th Apr 11, 12:05pm 1304035535

Do you reckon they pay their tax on those cash sales or that head into the tax free income cookie jar?

by Kunst | 29th Apr 11, 12:19pm 1304036392

Growth and diversification of individual businesses has occurred in all surveyed farmers’ markets. Also, small scale producers’ aims often coincide greatly with the interests of local authorities, which have responsibility for stimulating economic development in their regions.