90 seconds at 9 am: Strong US data

90 seconds at 9 am: Dow loses most in 2013; good trade, jobs and housing data brings taper closer; China and Aust house prices rise; NZ$1 = US$0.809 TWI = 76.0

19th Aug 13, 8:46am by David Chaston

Here's my summary of the key news overnight in 90 seconds at 9 am, including news of strong US data.

Global equities took fright Friday and closed at a six week low, the Dow now only just over the 15,000 level after recording its biggest weekly loss in 2013.

Those better-than-expected US jobs numbers we reported late last week have the markets thinking the US Fed is closer to tapering off its stimulus, and the period of easy money may be ending.

US exports are rising, on the back of strong US petroleum production.

And the rate of new American home-building rose in July, spurred on by a rise in the construction of new apartments.

It rose 5.9% from June. But the rate of new single-family houses being built dropped by 2.2% - a sign that builders could be worried about rising mortgage rates. Permits to build new homes rose 2.7% but missed analysts' expectation.

However, this week we will get data that is expected to show that home sales increased in July to the highest level in more than three years as growing demand for residential real estate reinforces their economic expansion.

There was news of higher new home prices in China too. They rose for a third month in a row, led by gains in the biggest metropolitan centers. There are now fears that a sharper correction will be needed now to bring prices into line with income.

And staying in China, American authorities have opened a bribery investigation into whether JPMorgan Chase hired the children of powerful Chinese officials to help the bank win lucrative business contracts.

And of course, the Bo Xilai trial is about to begin later this week.

And finally, there is talk of a property price boom in Australia. Auction clearance rates are high, interest rates are low, and returns on savings are negative - all ingredients for a property price rise say analysts.

The NZ dollar starts the week at 80.9 USc, 88.1 AUc, and the TWI is at 76.0.

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29 Comments

by SK | 19th Aug 13, 9:44am 1376862269

The markets hate these v strong numbers.

How Bizzare!

by SK | 19th Aug 13, 9:46am 1376862368

Perhaps a realistic 'non-steroid level' DOW could be 13000 atm

by Gummy Bear Hero | 19th Aug 13, 10:22am 1376864545

Perhaps a realistic 'non-hickeysterical' DOW could be 17000 atm

by Stephen Hulme | 19th Aug 13, 10:45am 1376865933

Who cares, home is where the money is?

by SK | 19th Aug 13, 10:57am 1376866658

The rush to gear to the tits into the Auckland property market.

Theres no game like it.

by south paw | 19th Aug 13, 11:17am 1376867849

Here's a nice young kiwi couple with 3 kids who actually managed to bid successfully at auction for a house because the crowd of Asians present were reluctant to buy a house with the address number 44 - because 4 sounds like "death" in their language.

NZ Herald: Superstition works out

Its our young kiwi families who have become endangered species.

Throw in gay "marriages" starting today with Louise Wall claiming it is something we can all be proud of.

Ms Wall didn't even have the mandate of her own constituency for that little PC demolition job.

by SK | 19th Aug 13, 11:54am 1376870065

It doesnt say they are a kiwi couple - maybe they are not.

It doesnt say they are nice - maybe they are of completely deplorable character.

At least a gay didnt buy it - they should really be disallowed from owning property or voting - stand up for oppressed hetro rights!

by Gummy Bear Hero | 19th Aug 13, 12:40pm 1376872814

I don't mind if they are gay .... or dark .... Chinese even ... but no economist is gonna purchase my Gummy abode .... especially Austrian Economists ... none of them better set foot upon my doorstep .... no sireeeee .... and most of all , Austrian economists who believe in the time structure of production and consumption .... feck the lot of them ..... go live in Herne Bay ..... tossers ...

by SK | 19th Aug 13, 1:01pm 1376874094

Austrians?

I thought they were fairly benign since the prussians, or was it napolean, kicked their habsburg asses...

Should have paid more attention at skool.

by south paw | 19th Aug 13, 1:35pm 1376876100

"It doesnt say they are a kiwi couple - maybe they are not."

Then the article wouldn't make any sense. It's all about context, cup cake.

"It doesnt say they are nice - maybe they are of completely deplorable character."

Struggling young family raising 3 kids, holding down jobs, buying a family home in a distorted market and the odds against them - how could they ever be COMPLETELY deplorable?

"At least a gay didnt buy it"

Anytime you want to have real debate about gay "marriage" fine, but much like your above comment the pro gay marriage advocates have only ever resorted to an appeal to emotion and Political Correctness.

Families are an endangered species - divorce and kids raised without a father or passed around like unwanted belongings.

by SK | 19th Aug 13, 1:44pm 1376876641

You filled in the factual gaps of the article - with your own bias, to give the article the 'context' to support the views you already have.

Fair enough - that's human nature darling.

Too late to debate gay marriage because its passing into law today isnt it?

Happy gay marriage day for the gays!

by south paw | 19th Aug 13, 4:56pm 1376888175

"Happy gay marriage day for the gays"

Its a sham, its not a marriage - like the ponzi global economy just another indication our civilization has become completely detached from reality.

by Gummy Bear Hero | 19th Aug 13, 5:07pm 1376888827

... and philosophers ... tell them to take a flying leap at themselves if they wannna buy your house .... particularly the cartesian dualists .... sods , every one of them .... they can just keep their money and nick off ....

by steven | 19th Aug 13, 2:07pm 1376878068

No fairness...2 ppl want to be one unit, it impacts no one else but them.

regards

by south paw | 19th Aug 13, 5:03pm 1376888638

It is redefining marriage. Marriage is an important social institution, that is why the state recognises it and encourages it. Redefining it has an impact on everyone in that society.

You know plenty of gays weren't interested in the marriage crusade - they didn't see it as a human rights abuse as was spun by the pro gay marriage propgandarists.

by steven | 19th Aug 13, 1:32pm 1376875950

Yep, chinese in particular avoid 4s and multiples so 44 is way worse than 4 and 444! oh my!!. Now an 88 or 888 may have sold 100% over book value.

My wife drives me nuts at times....cant use 4 screws, to make something has to be 3 or 5....

regards

by puketepapa | 19th Aug 13, 1:35pm 1376876126

The implications of one teensy-weensy little bit of info in that NZ Herald article was they (the cauckland couple) were the "only bidders" which tells you a lot about the buyers in the market in general .. but also tells you how dumb the vendors were - they should have temporarily changed the number on their letter box to 88 for the duration of the sales program.

by Gummy Bear Hero | 19th Aug 13, 1:36pm 1376876183

... or " 666 " ... that's a sweet little number ...

by notaneconomist | 19th Aug 13, 4:28pm 1376886538

Compulsory de-horning......

by south paw | 19th Aug 13, 10:31am 1376865072

Wall Street is a skanky drug addict, high on the financial meth that it gets for free from the Federal Reserve.

Here's the reality of the USA economy:

76% of Americans live paycheck to paycheck.

27% have no savings at all.

46% have less than $800 savings.

50 million Americans on food stamps.

The second biggest US employer is a temp agency.

by SK | 19th Aug 13, 10:59am 1376866786

A drug addict in a casino with a long list of pending court summons and a penchant for hookers.

by south paw | 19th Aug 13, 11:05am 1376867108

And lots of mates in powerful government postions.

And gets to write all the rules, and rig the table.

And cosy connections with psycho mass killing Mexican drug lords who launder their cash through Wall Street banks.

by Gummy Bear Hero | 19th Aug 13, 11:06am 1376867161

... no need to be rude ...

Mr Chaston is here to recuperate and rehabilitate himself .... be kind , please !

by steven | 19th Aug 13, 2:03pm 1376877820

If this doesnt tell you how perverse things are now I dont know what does,

"Global equities took fright Friday and closed at a six week low, the Dow now only just over the 15,000 level after recording its biggest weekly loss in 2013.

Those better-than-expected US jobs numbers we reported late last week have the markets thinking the US Fed is closer to tapering off its stimulus, and the period of easy money may be ending."

So selling on good results instead of buying...wierd.

regards

by iconoclast | 19th Aug 13, 2:16pm 1376878610

Steven: Nothing weird about it at all. It was not un-expected. It has nothing to do with jobs numbers. It all depends on where you look for your information and what you are looking for. The NYSE even publishes (once only, at the beginning of the year) a calendar of events including the dates.

by steven | 19th Aug 13, 3:16pm 1376882178

Well if ppl sell what should shares that go up in value as things improve they must think the NET effect is negative. That is worrying...like the bond market when things improve (if they ever do) we'll see what looks like a big financial shock as ppl run from the markets...

Maybe I mean perverse....

or Im still not following you......

regards

by iconoclast | 19th Aug 13, 4:48pm 1376887709

Steven: you are looking at it from a value investment perspective - how can something that is going up in value go down in price?

Think derivatives. Using wheat as an example. But applies to stocks and shares even more so these days. Delivery requirements are the same. If you were a wheat farmer who has just planted a field of wheat, and the price of wheat is high you can sell the "right" to that wheat now, at todays high price to a trader-buyer who thinks the price will go even higher. At some time in the future you will either have to buy that "right" back or deliver the wheat, which you would do if the price falls, fulfilling your original view. However, if the price of wheat doubles, and, come the day of delivery, the trader-buyer will want "title" to the wheat, but won't want to take physical delivery, so he will sell, by dumping it on the market. He has 24 hours to settle and get rid of it. The next scheduled US monthly settlement date is mid September and the big quarterly settlement late September.

If you are curious, go back and have a look at what happened to the markets on 19th and 20th June, China interest rate spiked to 25% for 1 day, NY share prices, and AU indexes crashed. Just happened to be settlement date.

by iconoclast | 19th Aug 13, 4:53pm 1376888009

Little reported - not in nz anyway - remember last Thursday? - again, settlement date

A mysterious surge in Chinese stock markets that lifted major indexes sharply Friday AM session, evaporated just as fast Friday PM session - amid claims the entire rally stemmed from a trading mistake. The Shanghai Index started the day lower and then inexplicably rocketed up mid-morning, pulling Hong Kong shares up with it. Late Friday afternoon, China's regulator said it was still investigating. Traders and analysts offered a variety of explanations for the spike: that it was engineered by regulators to punish short-positions in Chinese banks; that it was an error in the Shanghai Stock Exchange's computer; that the central government was planning to convert its holdings in large caps into preferred stock.

The most plausible theory is the spike was due to a trading error at China Everbright Securities. China Everbright Securities later told the Shanghai Stock Exchange, that its proprietary arbitrage trading system had a problem in the morning. Was it human error? "We know something went wrong at Everbright Securities" said a trader at a major Chinese brokerage SMH Fridays fat-finger-shanghai-flash-rally

by iconoclast | 22nd Aug 13, 12:32pm 1377131554

Not reported in lil'ole new zealand - or - How NZ dodged an Auckland "property bullet"

Thanks to the Fijian Police, Fijian Border Patrol, and Interpol

The following article comments on the travel plans of an insurance company executive whose travel intentions were originally Canada then switched to Fiji which of course is a staging-post or convenient back-door into new zealand .. of note in the last paragraph is the mention of that financial giant Everbright Securities .. again .. their fame follows them

http://www.foxnews.com/world/2013/08/20/china-returns-runaway-executive…