'OVERLY CAUTIOUS' BERNANKE CUTS US GROWTH FORECAST - The Federal Reserve chairman Ben Bernanke has cut the growth forecast for the world's largest economy for this year and next. It also left interest rates unchanged at an enviable 0-0.25%.
Chris Thornberg, principal of Los Angeles-based Beacon Economics, says the Fed had to digest a raft of negative economic news recently, including supply chain disruptions due to the Japanese earthquake and rising oil prices. But he says that Mr Bernanke is being overly cautious as the underlying fundamentals of the US economy are sound. He says that first quarter economic growth was affected by a pullback in defence spending, while the second quarter was impacted by higher oil prices and the disasters in Japan. But other elements of the US economy performed well, he added. He predicts the US economy will accelerate this year, and expects 'pretty decent numbers for next year'.
***
DESPITE TOUGH CONDITIONS DIXONS PUT IN ROBUST PERFORMANCE - Dixons, which trades as PCWorld and Currys in Ireland, today announced a 5% fall in sales in annual results to the end of April. Declan Roynane, who heads up the Irish operations, says that unsurprisingly the market environment remains challenging and the group has seen no growth in 40 months. However, he adds that despite the conditions Dixons put in a robust performance and managed to increase its market share last year. He says Dixons has multi-channel retail operations, with the company investing in its online operations as well as its stores.
Mr Roynane says that all retailers here face three main costs - labour costs, rents and local authority rates. He says there is a disproportionate focus on labour costs and says that rents are actually more of a concern. He says that retailers are stuck with fixed Celtic Tiger era rents, while local authorities seem in no rush to cut their rates. He says he has written to Minister Richard Bruton to say that Dixons could be in a position to create a small number of new jobs if the JLCs are changed, while it could create as many as 50 jobs if rents came down.
***
MORNING BRIEFS - One of the biggest listed companies here, the multi-purpose DCC said its 70% subsidiary, DCC Environmental Britain Limited, is spending €10.8m on a Nottinghamshire based waste oil and hazardous waste collection, processing and recycling business called Oakwood Fuels.
*** The euro slipped this morning, while Asian stocks steadied but were still locked in a downtrend for the past six weeks, with investors prone to sell risky assets ahead of a European leaders meeting kicking off later that will focus on Greece.
*** After a pretty momentous week or so, all eyes will focus on what Finance Minister Michael Noonan will say this lunchtime when he addresses the Financial Services Ireland Annual Lunch in dublin.
*** On the currency markets, the euro is worth $1.43 and 89 pence sterling.
