Here’s today’s ‘Just A Minute’ bringing you a 60 second summary of what’s happening in the financial markets:
Main Trading Event Of The Day: U.S. ISM Manufacturing @ 14.00 GMT
WHAT WE’RE WATCHING TODAY
Jobs Help Seal US Spring Rebound
The United States has finally consigned its weather-beaten start to the year to history this week as jobs data is expected to show a strong end to the second quarter. The U.S. economy contracted at a 2.9 percent annual rate, the sharpest decline in five years, in the first quarter of this year. An extremely severe winter, the expiration of long-term unemployment benefits and a notable slowdown in restocking by businesses combined to negatively impact the world’s largest economy, but these factors are expected to have faded by April. Monthly jobs data, arguably the most important gauge for both the Federal Reserve and the American people, is expected to show U.S. firms are continuing to hire at a solid pace as economic activity and growth takes hold. U.S. employment already returned to its pre-recession peak in May, with nonfarm job gains of 217,000 which would be a fifth straight month of job gains above 200,000, a run unmatched since the Sept 1999-Jan 2000 period. The jobs figures on Thursday are also set to feature a steady 6.3 percent unemployment rate.
Meanwhile forecasts for the influential ISM (Institute for Supply Management) manufacturing and services reports due today, point to a further acceleration of growth, with respectively a fifth and fourth consecutive rise in the monthly indices. Economists predict growth could top an annualized 5 percent in the April-June period due to a rise of inventories, a rebound of investment and a boost from trade. Less optimistic economists suggest the jobs and ISM reports should at least provide a counterbalance to muted consumer spending in May. Consumer spending rose by just 0.2 percent in the month following a flat reading in April, prompting some economists to cut their estimates for second-quarter growth to as low as a 2.2 percent pace from as high as 4.0 percent before.
Japan Business Sentiment Takes A Negative Hit
Business sentiment in Japan took a negative impact in the three months to June but is expected to recover in the months ahead, as revealed in the Bank of Japan’s tankan survey on Tuesday - another sign the economy should weather a rise in the country’s sales tax. The headline index for big manufacturers’ sentiment slipped by five points from three months ago to plus 12 which reflects the drag on consumer spending and the economy from the April 1 increase in Japan’s sales tax to 8 percent from 5 percent which was the first rise in the consumption tax in 17 years. However, big manufacturers said they expect business conditions to improve in the following quarter. The closely-watched tankan report also showed big firms plan to raise their capital spending by 7.4 percent for the fiscal year that started in April. Japan’s blue-chip Nikkei stock index opened 0.12 percent higher, while the yen was little changed around 101.35 per dollar.
Google Designs A Safer Car Touchscreen
Car manufacturers are increasingly integrating touchscreens into vehicles to the dismay of safe-driving advocates, who fear people are already too distracted by phone calls and texts while driving. Tech companies are, however, responding by designing what they say are safer ways for customers to stay focused on their favorite apps and online services behind the wheel. Google’s Android, for example, is working on an interface to make it safer and more user-friendly through a platform called Android Auto, which allows maps, music, and personal organization functions on your phone to be accessed through a larger screen in the car. Followers are describing it as Android’s answer to Apple’s CarPlay. Interest in designing a smart screen for the car is growing increasingly popular with 28 carmakers already in the Open Automotive Alliance working with Android Auto. For Google, using Android Auto means drivers will continue using its services during their commute.
That sums up today’s highlights! We hope you have a profitable day on the markets.
