Morning business news - September 11

Wednesday 11 September 2013 08.53
Morning business news - September 11
Morning business news - September 11

The Nasdaq closed at a 13 year high on Monday as the relatively positive flow of economic data continues.

But many might be surprised to hear that Irish shares have been among the best performers in the developed world this year and in the past few years, according to the S&P Dow Jones - Global Broad Market Index.

Aidan Donnelly, investment strategist with Davy says the recovery has been gradual and due to a confluence of factors.

"Global markets have been strong this year. Investors have been flocking to defensive names like Kerry, Aryzta, Fyffes," he points out.

"There have been a few company specific stories too as investors jump on an improving recovery in Ireland. Bank of Ireland and CPL have done very well. Grafton and Kingspan are strong on the back of good home building initiatives by the UK government."

Aidan Donnelly emphasised that the market is coming from a low base.

"The market is still well below where it peaked in 2007. Many of the individual companies are back at levels seen six years ago or even higher. So it can be misleading to look at the index level overall."

He points out that the good performance of many companies has held up despite the threat of withdrawal of stimulus in the US, which has had a negative effect on many global markets.

"That's where the company specific announcements come in. Grafton, Kingspan and Smurfitt have all announced debt reduction measures. We've had the Elan takeover. These factors are definitely coming to play in overall market performance," he concludes.


It is not yet known when the new iPhone 5S or 5C launched last night will arrive in shops here.

The new phones will be launched in Britain on Friday week, the 20th.

There has been some surprise at the pricing of the new cheaper model the iPhone 5C.

The basic 16GB model has been priced at £469 - that is more than what was being charged for the 4S.

The new 5S will retail at between £550 and 710 - without contract.

Apple shares were down around 2.5% to just over $493 after the launch.


Change is on the way for the Dow Jones industrial average.

On 20 September, Alcoa, Bank of America and HP will be dropped from the listing.

Nike, Visa and Goldman Sachs will be added.

There's some debate as to how significant the index is now given that it includes just 30 companies.

Some argue that the S&P 500 is now more influential and a better indicator.


An unusual public debate has started in the US over the selection of a new chairman of the Federal Reserve to replace Ben Bernanke who steps down when his term ends in the next few months.

Republican Senator Johnny Isakson expressed concerns about the potential nomination of former Treasury Secretary Lawrence Summers, but stopped short of saying he would oppose him.

A number of senators - mostly Democrats - have criticized Summers for easing banking restrictions and not regulating derivatives when he was treasury secretary in the 1990s during Bill Clinton's presidency.

Some believe that helped lay the foundation for the recent financial crisis.


The jobless rate for the UK is released today which economists expect to remain at 7.8%.

It has been at that rate since March but recent good economic indicators in Britain are leading some to believe that the unemployment rate could start to fall faster than many expect.

That could put pressure on the Bank of England to start increasing interest rates.

Mark Carney, the new governor there, has committed to keeping rates at a historic low of half a percent until the jobless rate goes below 7%.