Here’s today’s ‘Just A Minute’ bringing you a 60 second summary of what’s happening in the markets:
Main Trading Events Of The Day: USD New Home Sales @ 15.00 GMT
WHAT WE’RE WATCHING TODAY
New Home Sales Seen Declining For Third Month As Gold Holds Near 4-Month High
Weaker than expected data is being reported almost everywhere. New home sales likely declined 2.2% to a 405K rate in January, slumping for the third month in a row. The forecast for a decline in the pace of new home sales in January is based on declines in both starts and permits issued for new single-family homes during the month. Poor weather conditions appear to have negatively impacted residential construction activity and made it tough to pick out underlying trends for the housing market, as indicated in recent surveys from the National Association of Homebuilders’ Housing Market Index. A new study released today by the Demand Institute showed that the U.S. housing sector is likely to experience an uneven recovery over the next five years, with some local markets bouncing back faster than others. As the U.S. economy strengthens and employment rises, potential buyers will find entry into the market easier. However, the group also predicted that about 4 million households will fail to realise their current purchasing aspirations. The main driver of demand in the next five years is predicted to be the formation of new households.
Meanwhile, gold on Wednesday hovered close to a four-month high hit the day before as data raised questions about the strength of the U.S. economy, burnishing gold’s safe-haven appeal. Investors have poured back into the metal on worries about economic conditions in the United States and also China, which is now dealing with unprecedented growth in company debt. Gold eased 0.13 percent to $1,338.41 after rising to its strongest since October at $1,343.40 an ounce in its fourth day of gains. Despite recent gains, gold is still well below an all time high around $1,920 struck in 2011.
Do Emerging Markets Now Offer Good Value?
After months of fund outflows, analysts believe that emerging markets offer solid value. Emerging markets have been beaten up a lot recently and have consequently seen a brutal sell-off this year after sharp falls in the value of the Argentine peso, Turkish lira, South African rand and Brazilian real triggered panic selling across the asset class. Analysts largely blame the turbulence on the Federal Reserve’s move to begin tapering its asset purchases. Funds have flowed out of emerging market equity funds for 13 consecutive weeks with a total $18.76 billion exiting the segment so far this year. But while concerns about tapering and the potential for higher interest rates have decked emerging market assets, not everyone is certain this will hurt economies. Kelvin Tay from UBS Wealth Management believes instead, that the Fed’s easy money policy spurred a lot of borrowing by companies in Asia and Latin America, adding that if the rates go up gradually, he did not see a risk to the systems here or in Latin America - only if the rates were to go up very sharply would there be a problem. Analysts are selective on which emerging markets to play, preferring the Asian region and tipping South Korea and China as value plays.
Disney Starts Online Movie Service in ITunes Alliance
Walt Disney Co. has started an online movie service, Disney Movies Anywhere, with Apple Inc. iTunes to increase sales of films such as “Toy Story” that can be stored in Web-based accounts. Movies can be played on Apple’s iPad, iPhone and iPod Touch, as well as through the Internet. Users will be able to link to iTunes and import films they’ve previously purchased there to Disney Movies Anywhere accounts. The service cements a longstanding TV and film alliance between Disney, the world’s largest entertainment company, and Apple. Analysts have said that “Disney Movies Anywhere” could stabilise Disney’s home-entertainment business, which has experienced lower results for five consecutive years and recommend buying Disney stock. Disney fell 0.6 percent to $80.21 at the close in New York. The shares have advanced 5 percent in 2014.
That sums up Wednesday’s highlights! We hope you have a profitable day on the markets.
