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The US Leading Index, which comprises a number of key indicators, increased 0.3% in October, following a 1.0% gain in September, and a 0.4% rise in August.
Ataman Ozyildirim, economist at the Conference Board said: “After half a year of consecutive increases, the month-to-month growth of the LEI (Leading Economic Index) is stabilizing and the gains continue to be broad-based. Meanwhile, the coincident economic index has been essentially flat since June, after declining since November 2007. The composite indexes suggest the recovery is unfolding and economic activity should continue improving in the near term.”
Six of the ten indicators that make up the leading index increased in October. The positive contributors -- beginning with the largest positive contributor - - were the interest rate spread, average weekly initial claims for unemployment insurance (inverted), stock prices, average weekly manufacturing hours, real money supply and manufacturers’ new orders for consumer goods and materials. The negative contributors - - beginning with the largest negative contributor - - were index of consumer expectations, building permits, index of supplier deliveries (vendor performance), and manufacturers’ new orders for nondefense capital goods.
Geithner positive on economy
US Treasury secretary Tim Geithner said Thursday he expects US economic growth will extend into next year and called on Congress to pass “as soon as possible” legislation on financial regulation.
“After an extended and painful contraction, we saw solid annualized GDP growth of 3.5%. We expect continued growth in the fourth quarter and ahead in 2010,” Geithner said today in prepared testimony to the Joint Economic Committee.
Geithner said the necessary tools must be available to regulators to cushion the broader financial system against potential shocks, in times of severe stress. Otherwise, in a financial panic, credit in the economy, to small businesses and homeowners could grind to a halt. "To make sure the tools we have are effective but narrowly tailored to achieving financial stability goals, we have proposed to modify the emergency authorities of the FDIC (bank deposit insurance agency) and the Federal Reserve," he said."Their authorities should be subject to appropriate checks and balances and should be available only to protect the financial system as a whole, not individual institutions. "
CNBC's Steve Liesman parses Geithner's testimony in front of the Joint Economic Committee:
US markets
Falls in metals, crude oil and an analyst downgrade of chip stocks, dampened sentiment on Wall Street, Thursday.
Manufacturing in the Philadelphia region was reported today to have grown in November at the fastest pace in more than two years.
The Federal Reserve Bank of Philadelphia’s general economic index rose to 16.7, from 11.5 in October, figures from the bank showed today. Readings above zero signal growth.
The US Labor Department reported today that new claims for jobless benefits remained steady at 505,000 in the week ended Nov. 14th. The previous week's level was revised to 505,000 from 502,000.
The four-week moving average of new claims, which smooths volatility in the data, fell by 6,500 to 514,000 from the previous week's revised average of 520,500 - - the lowest figure since November 22, 2008.
The number of continuing claims, fell by 39,000 to 5,611,000 from the preceding week's revised level of 5,650,000.
The Dow is down 161 points or 1.54% to 10,266, in New York, Thursday.
The Nasdaq has dipped 2.24% and the S&P 500 has declined 1.90%.
The Federal Reserve and European Central Bank will keep interest rates on hold until the end of 2010, the OECD said Thursday. Margie Patel from Evergreen Investments and Tim Harris from Harris Capital discuss the implications of this scenario for investors.
INM is down 8% and IL&P has fallen almost 7% - - the third day of declines.
Greencore
Greencore today announced the sale of it bottled water business to Highland Spring for up to €19.6m.
Under the terms of the deal, Greencore will get €11.2m when the transaction is completed, €3.4m deferred until the second year after completion and up to €5m depending on performance.
Greencore Water operates from two facilities at Campsie Springs in Scotland and Blaen Twyni in Wales and supplied branded water in the UK.
The unit had a loss before tax of €4.5m in 2008 while its net assets were valued at €20.1m.
Greencore's shares are down over 2% in Dublin.
In order for the UK public deficit to be cut in line with government plans, "there will have to be some very unsavory tax increases or public spending cuts," Hetal Mehta from Ernst & Young ITEM Club told CNBC Thursday. James Bevan, CIO of CCLA Investment Management, joined the discussion:
On the New York Mercantile Exchange, oil for December delivery is trading at $77.77 down $1.81 from Wednesday's close. In London, Brent crude for December delivery is trading at $77.78 a barrel.
Currencies
The euro is trading at $1.4879 and at £0.8953.
For live currency updates, check the right-hand column of the Finfacts home page.The dollar traded at a record low $1.6038 per euro on July 15, 2008.
