Asia markets broadly recover following extended rout on Wall Street

Asia stocks saw a broad recovery on Friday following another tumble on Wall Street overnight, with the Dow Jones Industrial Average dropping by more than 500 points. In Japan, the Nikkei 225 saw gains of 0.46 percent to close at 22,694.66 while the Topix index ended largely flat at 1,702.45. The energy sector, however, was lower by 1.5 percent, while the heavily weighted financial subindex was largely flat. The move in ANZ’s stock came following an announcement by its chief executive that the ba


Asia stocks saw a broad recovery on Friday following another tumble on Wall Street overnight, with the Dow Jones Industrial Average dropping by more than 500 points. In Japan, the Nikkei 225 saw gains of 0.46 percent to close at 22,694.66 while the Topix index ended largely flat at 1,702.45. The energy sector, however, was lower by 1.5 percent, while the heavily weighted financial subindex was largely flat. The move in ANZ’s stock came following an announcement by its chief executive that the ba
Asia markets broadly recover following extended rout on Wall Street Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-10-12  Authors: eustance huang
Keywords: news, cnbc, companies, wall, extended, ended, following, asia, lower, index, gains, markets, higher, street, recovery, saw, rout, recover, largely, flat, broadly


Asia markets broadly recover following extended rout on Wall Street

Asia stocks saw a broad recovery on Friday following another tumble on Wall Street overnight, with the Dow Jones Industrial Average dropping by more than 500 points.

In the Greater China region, Hong Kong’s Hang Seng index advanced by 2.07 percent in afternoon trade.

Over on the mainland, the Shanghai composite bounced on the back of positive trade data for the month of September to close higher by 0.91 percent at around 2,606.91, while the Shenzhen composite advanced by 0.19 percent at about 1,296.36.

In Japan, the Nikkei 225 saw gains of 0.46 percent to close at 22,694.66 while the Topix index ended largely flat at 1,702.45.

The ASX 200 closed higher by 0.2 percent at 5,895.7 after losing 0.52 percent earlier in the session. The energy sector, however, was lower by 1.5 percent, while the heavily weighted financial subindex was largely flat.

Shares of major banks Down Under saw a recovery though some still ended the trading day lower, with Australia and New Zealand Banking Group down by 0.38 percent while Commonwealth Bank of Australia was largely flat. The move in ANZ’s stock came following an announcement by its chief executive that the bank had fired over 200 staff for wrongdoing.

Over in South Korea, the Kospi saw gains of 1.54 percent at 2,162.37, with shares of chipmaker SK Hynix advancing 5.07 percent.


Company: cnbc, Activity: cnbc, Date: 2018-10-12  Authors: eustance huang
Keywords: news, cnbc, companies, wall, extended, ended, following, asia, lower, index, gains, markets, higher, street, recovery, saw, rout, recover, largely, flat, broadly


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Consumer sentiment: Preliminary October reading

A survey of consumer sentiment in October fell just short of expectations on Friday but found American confidence in U.S. economic policy was at a 15-year high. The University of Michigan’s monthly survey of consumers hit 99 in its preliminary reading for October, below the 100.4 expected from economists polled by Reuters. The index remained just below September’s reading of 100.1. Within the survey, a key data point revealed growing bipartisan support for the government’s economic policies. The


A survey of consumer sentiment in October fell just short of expectations on Friday but found American confidence in U.S. economic policy was at a 15-year high. The University of Michigan’s monthly survey of consumers hit 99 in its preliminary reading for October, below the 100.4 expected from economists polled by Reuters. The index remained just below September’s reading of 100.1. Within the survey, a key data point revealed growing bipartisan support for the government’s economic policies. The
Consumer sentiment: Preliminary October reading Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-10-12  Authors: michael sheetz
Keywords: news, cnbc, companies, sentiment, highest, survey, reading, preliminary, policies, level, index, governments, remained, consumer, economic


Consumer sentiment: Preliminary October reading

A survey of consumer sentiment in October fell just short of expectations on Friday but found American confidence in U.S. economic policy was at a 15-year high.

The University of Michigan’s monthly survey of consumers hit 99 in its preliminary reading for October, below the 100.4 expected from economists polled by Reuters. The index remained just below September’s reading of 100.1.

“Consumer sentiment slipped in early October, although it remained at quite favorable levels and just above the average reading during 2018,” Richard Curtin, chief economist for the survey, said in a statement.

Within the survey, a key data point revealed growing bipartisan support for the government’s economic policies.

“Confidence in the government’s economic policies rose in October to its highest level in the past fifteen years (see the chart), reflecting the strong performance of the national economy,” Curtin said. “Most of the October gain was due to an upward adjustment by Democrats, although their evaluations were still well below the much more favorable evaluations of Republicans.”

The overall index has slumped since March when it reached its highest level since 2004 with a reading of 101.4.

The survey considers 500 consumers’ outlook on economic prospects, accounting for sentiment on personal finances, inflation, unemployment, government policies and interest rates.


Company: cnbc, Activity: cnbc, Date: 2018-10-12  Authors: michael sheetz
Keywords: news, cnbc, companies, sentiment, highest, survey, reading, preliminary, policies, level, index, governments, remained, consumer, economic


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Asia stocks crumble: Shanghai topples more than 5%, Nikkei declines nearly 4%

Asia markets fell sharply on Thursday, with the stock indexes in Shanghai and Shenzhen both tumbling more than 5 percent. In the Greater China region, the Hang Seng index was down by 3.88 percent in afternoon trade. Over on the mainland, the Shanghai composite fell 5.22 percent to close at 2,583.46 and the Shenzhen composite plunged 6.445 percent to end at 1,293.90. The fall in the Shanghai index was its worst day since February 2016, according to Chinese financial services firm Wind Information


Asia markets fell sharply on Thursday, with the stock indexes in Shanghai and Shenzhen both tumbling more than 5 percent. In the Greater China region, the Hang Seng index was down by 3.88 percent in afternoon trade. Over on the mainland, the Shanghai composite fell 5.22 percent to close at 2,583.46 and the Shenzhen composite plunged 6.445 percent to end at 1,293.90. The fall in the Shanghai index was its worst day since February 2016, according to Chinese financial services firm Wind Information
Asia stocks crumble: Shanghai topples more than 5%, Nikkei declines nearly 4% Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-10-11  Authors: eustance huang
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Asia stocks crumble: Shanghai topples more than 5%, Nikkei declines nearly 4%

Asia markets fell sharply on Thursday, with the stock indexes in Shanghai and Shenzhen both tumbling more than 5 percent.

In the Greater China region, the Hang Seng index was down by 3.88 percent in afternoon trade. Over on the mainland, the Shanghai composite fell 5.22 percent to close at 2,583.46 and the Shenzhen composite plunged 6.445 percent to end at 1,293.90.

The fall in the Shanghai index was its worst day since February 2016, according to Chinese financial services firm Wind Information.

In Taiwan, the tech-heavy Taiex dropped by 6.31 percent to close at 9,806.11, with shares of lens maker and Apple supplier Largan Precision plunging 9.89 percent.

Japan’s markets also faltered. The Nikkei 225 dropped by 3.89 percent to close at 22,590.86 while the Topix index declined by 3.52 percent to end the trading day at 1,701.86, with major sectors down.


Company: cnbc, Activity: cnbc, Date: 2018-10-11  Authors: eustance huang
Keywords: news, cnbc, companies, shenzhen, day, fell, dropped, asia, shanghai, close, nearly, markets, nikkei, topples, end, stocks, index, crumble, composite, declines


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European stocks slump again as renewed Wall Street sell-off provokes volatile session

The pan-European Stoxx 600 closed the session provisionally down by 1.95 percent, with financial services and oil and gas stocks leading the losses. A dramatic sell-off on Wall Street in the previous session had prompted the European benchmark to fall to its its lowest level in more than 21 months before it recovered slightly. In Germany the DAX finished off by 1.36 percent, while stocks listed on the CAC 40 in Paris lost 1.79 percent on average. Looking at individual stocks in Europe, Britain’s


The pan-European Stoxx 600 closed the session provisionally down by 1.95 percent, with financial services and oil and gas stocks leading the losses. A dramatic sell-off on Wall Street in the previous session had prompted the European benchmark to fall to its its lowest level in more than 21 months before it recovered slightly. In Germany the DAX finished off by 1.36 percent, while stocks listed on the CAC 40 in Paris lost 1.79 percent on average. Looking at individual stocks in Europe, Britain’s
European stocks slump again as renewed Wall Street sell-off provokes volatile session Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-10-11  Authors: sam meredith, silvia amaro, ryan browne
Keywords: news, cnbc, companies, street, stocks, session, london, selloff, lower, shares, renewed, stoxx, slump, volatile, finished, provokes, european, index, 600, wall


European stocks slump again as renewed Wall Street sell-off provokes volatile session

The pan-European Stoxx 600 closed the session provisionally down by 1.95 percent, with financial services and oil and gas stocks leading the losses. A dramatic sell-off on Wall Street in the previous session had prompted the European benchmark to fall to its its lowest level in more than 21 months before it recovered slightly.

However that up tick was short-lived as renewed selling on both sides of the Atlantic gathered pace. At one point in the mid-afternoon, the two-day loss on the Dow Jones Industrial Average had reached 1,100 points.

In London, the FTSE 100 in London shed 1.94 percent on Thursday. In Germany the DAX finished off by 1.36 percent, while stocks listed on the CAC 40 in Paris lost 1.79 percent on average.

Global equity markets have tumbled in recent days on the back of heightened fears about global economic growth and rising interest rates. In the United States, the tech-heavy Nasdaq is on course for its worst month since November 2008.

Looking at individual stocks in Europe, Britain’s WH Smith plummeted to the bottom of the index after announcing new plans to restructure its high street stores. Shares of the London-listed stock finished down 11.16 percent on the news.

Britain’s Hays also traded sharply lower, after the recruitment agency warned currency headwinds could hit its fiscal 2019 year. Shares of the company ended lower by 10.4 percent

Meanwhile, shares in Germany’s Dialog Semiconductor rose 16.58 percent sit atop the Stoxx 600 index on Thursday. The company’s shares soared after it announced a new $600 million deal with Apple.


Company: cnbc, Activity: cnbc, Date: 2018-10-11  Authors: sam meredith, silvia amaro, ryan browne
Keywords: news, cnbc, companies, street, stocks, session, london, selloff, lower, shares, renewed, stoxx, slump, volatile, finished, provokes, european, index, 600, wall


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Tech stocks have their worst day since August 2011

Technology stocks got clobbered on Wednesday, suffering their worst day in more than seven years, as concerns over rising interest rates punished the overall market, particularly shares of companies that have been the best performers. The S&P 500 Information Technology Index closed at $1,220.62, down 4.8 percent, marking the biggest decline since August 18, 2011, when the index dropped 5.3 percent. All 65 members of the index fell. The broader S&P 500 dropped by 3.3 percent and the Dow Jones Ind


Technology stocks got clobbered on Wednesday, suffering their worst day in more than seven years, as concerns over rising interest rates punished the overall market, particularly shares of companies that have been the best performers. The S&P 500 Information Technology Index closed at $1,220.62, down 4.8 percent, marking the biggest decline since August 18, 2011, when the index dropped 5.3 percent. All 65 members of the index fell. The broader S&P 500 dropped by 3.3 percent and the Dow Jones Ind
Tech stocks have their worst day since August 2011 Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-10-10  Authors: jordan novet, fred imbert, adam jeffery
Keywords: news, cnbc, companies, suffering, tumbled, 2011, technology, index, 500, worst, dropped, day, shares, tech, sp, stocks


Tech stocks have their worst day since August 2011

Technology stocks got clobbered on Wednesday, suffering their worst day in more than seven years, as concerns over rising interest rates punished the overall market, particularly shares of companies that have been the best performers.

The S&P 500 Information Technology Index closed at $1,220.62, down 4.8 percent, marking the biggest decline since August 18, 2011, when the index dropped 5.3 percent. All 65 members of the index fell. The broader S&P 500 dropped by 3.3 percent and the Dow Jones Industrial Average tumbled 3.2 percent.


Company: cnbc, Activity: cnbc, Date: 2018-10-10  Authors: jordan novet, fred imbert, adam jeffery
Keywords: news, cnbc, companies, suffering, tumbled, 2011, technology, index, 500, worst, dropped, day, shares, tech, sp, stocks


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Two-thirds of the S&P 500 isin a correction

Two-thirds of the stocks in the S&P 500 ended the trading session in correction territory or worse on Wednesday, as a sell-off led by technology names deepened a steep drop for the index in October. The S&P 500 fell 3.3 percent at 2,785 amid fears of rising interest rates and the flight from tech stocks. There were 190 components in correction territory, meaning they have fallen by 10 to 20 percent from their 52-week highs. The stocks in correction included retail names like Michael Kors, financ


Two-thirds of the stocks in the S&P 500 ended the trading session in correction territory or worse on Wednesday, as a sell-off led by technology names deepened a steep drop for the index in October. The S&P 500 fell 3.3 percent at 2,785 amid fears of rising interest rates and the flight from tech stocks. There were 190 components in correction territory, meaning they have fallen by 10 to 20 percent from their 52-week highs. The stocks in correction included retail names like Michael Kors, financ
Two-thirds of the S&P 500 isin a correction Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-10-10  Authors: gina francolla, tom dichristopher, brendan mcdermid
Keywords: news, cnbc, companies, correction, names, territory, components, index, sps, 500, highs, twothirds, tech, sp, stocks, isin


Two-thirds of the S&P 500 isin a correction

Two-thirds of the stocks in the S&P 500 ended the trading session in correction territory or worse on Wednesday, as a sell-off led by technology names deepened a steep drop for the index in October.

When the dust settled on Wednesday, 332 of the S&P’s 505 components — or 66 percent of the index — had fallen by 10 percent or more from their 52-week highs. The S&P 500 fell 3.3 percent at 2,785 amid fears of rising interest rates and the flight from tech stocks.

There were 190 components in correction territory, meaning they have fallen by 10 to 20 percent from their 52-week highs. The stocks in correction included retail names like Michael Kors, financials such as Citigroup, and tech giants Amazon and Google’s parent Alphabet.

Meanwhile, another 142 stocks were down 20 percent from their recent peak, sitting in bear market territory. Tech components Intel, Facebook and Twitter were among those names, as were automakers Ford and GM and industrials American Airlines and GE.

Wednesday’s losses pushed the S&P’s drop this month to more than 4.4 percent, with the index posting its first five-day losing streak since late 2016.


Company: cnbc, Activity: cnbc, Date: 2018-10-10  Authors: gina francolla, tom dichristopher, brendan mcdermid
Keywords: news, cnbc, companies, correction, names, territory, components, index, sps, 500, highs, twothirds, tech, sp, stocks, isin


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European markets tumble at the close as Italy, China woes weigh; FTSE MIB falls 2.4%

On the bourses front, the FTSE 100 slipped 1.16 percent, while the French CAC 40 fell 1.10 percent and the German DAX dropped 1.36 percent. Europe’s banking index was among the worst sectoral performers, finishing down 1.37 percent amid renewed fears over Italy’s budget plans. The FTSE MIB index slipped 2.43 percent by the market close, with government bond yields hitting fresh highs during trade. The EU reiterated concerns over Italy’s budget plans over the weekend, saying it is worried Rome’s


On the bourses front, the FTSE 100 slipped 1.16 percent, while the French CAC 40 fell 1.10 percent and the German DAX dropped 1.36 percent. Europe’s banking index was among the worst sectoral performers, finishing down 1.37 percent amid renewed fears over Italy’s budget plans. The FTSE MIB index slipped 2.43 percent by the market close, with government bond yields hitting fresh highs during trade. The EU reiterated concerns over Italy’s budget plans over the weekend, saying it is worried Rome’s
European markets tumble at the close as Italy, China woes weigh; FTSE MIB falls 2.4% Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-10-08  Authors: sam meredith, ryan browne, alexandra gibbs
Keywords: news, cnbc, companies, stoxx, close, closing, plans, italys, european, markets, woes, weigh, falls, budget, highs, tumble, ftse, index, slipped, italy, mib


European markets tumble at the close as Italy, China woes weigh; FTSE MIB falls 2.4%

The pan-European Stoxx 600 tumbled 1.12 percent by the close, with all sectors in the region failing to post gains by the end of trade.

On the bourses front, the FTSE 100 slipped 1.16 percent, while the French CAC 40 fell 1.10 percent and the German DAX dropped 1.36 percent. All major markets in peripheral Europe closed in the red.

Europe’s banking index was among the worst sectoral performers, finishing down 1.37 percent amid renewed fears over Italy’s budget plans. The FTSE MIB index slipped 2.43 percent by the market close, with government bond yields hitting fresh highs during trade.

The EU reiterated concerns over Italy’s budget plans over the weekend, saying it is worried Rome’s plans breach what it asked the country to do earlier this summer. In response, Italy said it would “not retreat” from its current spending plans. The news appeared to ratchet up the pressure on the country’s already fragile banking sector, with Unicredit, Ubi Banca, Mediobanca and Banco BPM all closing the day down 3.5 percent or more each.

Looking at individual stocks, Norway’s Norsk Hydro held onto its crown as the STOXX 600’s top performer by the close, after the aluminum firm got a key permit to help it restart its Alunorte refinery at half-capacity. Shares of the Oslo-listed stock rose 3.9 percent on the news.

Tele2 finished up 1.6 percent, off its highs, after the company confirmed that the European Commission had approved its merger with Com Hem Holding. Europe’s biggest losers were William Demant and WireCard, which both posted sharp losses, closing down 10.6 percent and 12 percent respectively.


Company: cnbc, Activity: cnbc, Date: 2018-10-08  Authors: sam meredith, ryan browne, alexandra gibbs
Keywords: news, cnbc, companies, stoxx, close, closing, plans, italys, european, markets, woes, weigh, falls, budget, highs, tumble, ftse, index, slipped, italy, mib


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Asia markets: US-China relations, Fed, currencies in focus

Asia markets saw broad declines on the final trading day of the week, following a tumble overnight on Wall Street. The Nikkei 225 was down by 0.8 percent to close at 23,783.72, while the Topix index slipped by 0.47 percent to 1,792.65. Meanwhile, Hong Kong’s Hang Seng index slid by 0.19 percent to close at 26,572.57, with computer maker Lenovo’s stock dropping by 15.1 percent. Down Under, the ASX 200 bucked the overall trend to edge up 0.15 percent to close at 6,185.5, with the energy sector als


Asia markets saw broad declines on the final trading day of the week, following a tumble overnight on Wall Street. The Nikkei 225 was down by 0.8 percent to close at 23,783.72, while the Topix index slipped by 0.47 percent to 1,792.65. Meanwhile, Hong Kong’s Hang Seng index slid by 0.19 percent to close at 26,572.57, with computer maker Lenovo’s stock dropping by 15.1 percent. Down Under, the ASX 200 bucked the overall trend to edge up 0.15 percent to close at 6,185.5, with the energy sector als
Asia markets: US-China relations, Fed, currencies in focus Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-10-05  Authors: eustance huang
Keywords: news, cnbc, companies, energy, uschina, fed, focus, close, index, gas, markets, asia, slid, saw, earlier, relations, week, currencies, stock


Asia markets: US-China relations, Fed, currencies in focus

Asia markets saw broad declines on the final trading day of the week, following a tumble overnight on Wall Street.

The Nikkei 225 was down by 0.8 percent to close at 23,783.72, while the Topix index slipped by 0.47 percent to 1,792.65.

In South Korea, the Kospi slid 0.31 percent to close at 2,267.52, as shares of heavyweight Samsung Electronics ended largely flat despite earlier saying that its third-quarter operating profit was likely to have risen to a record high.

Meanwhile, Hong Kong’s Hang Seng index slid by 0.19 percent to close at 26,572.57, with computer maker Lenovo’s stock dropping by 15.1 percent.

Down Under, the ASX 200 bucked the overall trend to edge up 0.15 percent to close at 6,185.5, with the energy sector also higher by 0.15 percent. Oil and gas explorer Beach Energy, which had earlier announced the sale of a 40 percent stake in its Victorian Otway gas assets and trimmed its earnings guidance for fiscal year 2019, saw its stock fall by 3.65 percent.

China’s markets were closed for the Golden Week holiday.


Company: cnbc, Activity: cnbc, Date: 2018-10-05  Authors: eustance huang
Keywords: news, cnbc, companies, energy, uschina, fed, focus, close, index, gas, markets, asia, slid, saw, earlier, relations, week, currencies, stock


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European stocks: hawkish Fed; Italy’s budget in focus; Greece banks

Household goods and food and beverages stocks were the worst-performers down by more than 1 percent. Markets were adapting to further hawkish comments from the U.S. central bank. Jerome Powell, the U.S. Fed chairman, said that the bank was a “long way” from neutral on interest rates. Powell’s comments pushed the dollar to an 11-month high against the Japanese yen and they also pushed yields in euro zone bonds. Market players are worried about extra spending in the third largest euro economy, giv


Household goods and food and beverages stocks were the worst-performers down by more than 1 percent. Markets were adapting to further hawkish comments from the U.S. central bank. Jerome Powell, the U.S. Fed chairman, said that the bank was a “long way” from neutral on interest rates. Powell’s comments pushed the dollar to an 11-month high against the Japanese yen and they also pushed yields in euro zone bonds. Market players are worried about extra spending in the third largest euro economy, giv
European stocks: hawkish Fed; Italy’s budget in focus; Greece banks Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-10-04  Authors: silvia amaro
Keywords: news, cnbc, companies, fed, hawkish, yields, euro, pushed, focus, investors, greece, stocks, comments, budget, zone, index, italys, yen, worstperformers, bank, banks, european


European stocks: hawkish Fed; Italy's budget in focus; Greece banks

The pan-European Stoxx 600 was off by 0.2 percent with almost every sector in the red. Household goods and food and beverages stocks were the worst-performers down by more than 1 percent. Markets were adapting to further hawkish comments from the U.S. central bank. Jerome Powell, the U.S. Fed chairman, said that the bank was a “long way” from neutral on interest rates.

Powell’s comments pushed the dollar to an 11-month high against the Japanese yen and they also pushed yields in euro zone bonds.

Looking across the European index, Electrocomponents was among the top performers, up by more than 3 percent, after reporting that first-half profits jumped 27 percent from a year ago.

Shares in Danske Bank dropped 2.5 percent following news that the bank will be investigated by the U.S. Department of Justice for a money laundering scandal. Such probe could result in a big fine.

Meanwhile, investors kept a close eye on Italian politics. Prime Minister Giuseppe Conte said on Wednesday that the government deficit will be decreased in the next three years, despite the surge planned for 2019. Market players are worried about extra spending in the third largest euro economy, given its 130 percent of GDP debt pile. The main index in Italy, FTSE MIB, was down by 0.4 percent in early deals.

Elsewhere, shares in Greek banks are in the spotlight after a massive plunge on Wednesday. Investors fear that regulators will demand further capital. Shortly after the open, the biggest lenders traded in positive ground, recovering some of Wednesday’s losses.

On the date front, new car registrations due in the U.K. at 9 a.m. London time.


Company: cnbc, Activity: cnbc, Date: 2018-10-04  Authors: silvia amaro
Keywords: news, cnbc, companies, fed, hawkish, yields, euro, pushed, focus, investors, greece, stocks, comments, budget, zone, index, italys, yen, worstperformers, bank, banks, european


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A red flashing light in the housing market could spell trouble for the economy

But one warning sign of trouble could be flashing in the housing market, according to forecaster Lakshman Achuthan. ECRI’s U.S. leading home price index turned negative last April. “I wouldn’t say there’s a housing bust here now, but directionally we have a home price growth downturn,” Achuthan said. We think there’s a slowdown that’s happening here but on the housing and home price growth, absolutely it’s a red flashing light.” Falling home prices are not just a problem for the housing market;


But one warning sign of trouble could be flashing in the housing market, according to forecaster Lakshman Achuthan. ECRI’s U.S. leading home price index turned negative last April. “I wouldn’t say there’s a housing bust here now, but directionally we have a home price growth downturn,” Achuthan said. We think there’s a slowdown that’s happening here but on the housing and home price growth, absolutely it’s a red flashing light.” Falling home prices are not just a problem for the housing market;
A red flashing light in the housing market could spell trouble for the economy Cached Page below :
Company: cnbc, Activity: cnbc, Date: 2018-10-04  Authors: keris lahiff, getty images, hassan sarbakhshian, bloomberg, david mcnew, ander gillenea, afp, kcna, thomas barwick getty images, source
Keywords: news, cnbc, companies, flashing, leading, wealth, red, growth, market, price, prices, light, index, consumer, economy, negative, trouble, spell, housing


A red flashing light in the housing market could spell trouble for the economy

The U.S. economy is growing at a healthy pace, the labor market is its tightest in years and consumer confidence hasn’t been this high since 2000.

But one warning sign of trouble could be flashing in the housing market, according to forecaster Lakshman Achuthan.

“Our leading home price index has made a downturn that it hasn’t made in a long time,” Achuthan, co-founder of the Economic Cycle Research Institute, told CNBC’s “Trading Nation” on Wednesday. “The last time it was this weak … was in 2009 coming out of the last recession, and this leading index in 2006 really did call the housing bust.”

ECRI’s U.S. leading home price index turned negative last April. The S&P Case-Shiller home price index is not yet negative but is decelerating. In July, national home prices in 20 cities rose by an average 5.9 percent, its slowest pace in 10 months. Sluggish income growth and rising mortgage rates have depressed demand and prices.

“I wouldn’t say there’s a housing bust here now, but directionally we have a home price growth downturn,” Achuthan said. “For the overall economy, we have a yellow light. We think there’s a slowdown that’s happening here but on the housing and home price growth, absolutely it’s a red flashing light.”

Falling home prices are not just a problem for the housing market; they could easily spill over onto the broader economy, he said.

“The link really goes through the wealth effect,” he said, referring to the behavioral economic theory that consumer spending increases when perceived wealth increases. Declining asset prices such as real estate have a negative wealth effect.

“Instead of being a wind at the back of the consumer and consumer confidence, it’s now more of a headwind going forward. It remains to be seen just … how sharply this can fall, but the direction we have is clear,” he said.

Rising stock prices could offset some of the negative effects of falling home prices, at least at first, he added. The Dow hit an all-time high as recently as Wednesday.


Company: cnbc, Activity: cnbc, Date: 2018-10-04  Authors: keris lahiff, getty images, hassan sarbakhshian, bloomberg, david mcnew, ander gillenea, afp, kcna, thomas barwick getty images, source
Keywords: news, cnbc, companies, flashing, leading, wealth, red, growth, market, price, prices, light, index, consumer, economy, negative, trouble, spell, housing


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