Asian markets took heart from the passing yesterday by the
United States Senate and House of Representatives of spending
measures designed to reopen the Government.
The Australian market was lacklustre as the minerals sector
failed to fire and the New Zealand market was driven by
internal factors, Craigs Investment Partners broker Chris
Xero had another ''raging day'' - up 14% - after another
public briefing by chief executive Rod Drury, and Port of
Tauranga shares were in demand. Locally, Pacific Edge had a
strong day, he said.
Yesterday, Pacific Edge shares were up 10% after opening,
before settling at 69c, or 3% up on Wednesday. They were
still in the top three gainers during the day. More than 1.2
million shares traded for more than $800,000, compared with
$1.4 million traded the day before.
Mr Timms said the US had only delayed the inevitable re-run
of the debt ceiling debate until next year.
The Bill President Barack Obama promised to sign immediately
provided government funding until January 15 and the
borrowing limit had been extended until February 7.
Republicans dropped efforts to link the legislation to
changes in Mr Obama's signature healthcare law.
''The deal offers only a temporary fix and does not resolve
the fundamental issues of spending and deficits that divide
Republicans and Democrats,'' Mr Timms said. He expected a
rally overnight after US stocks surged yesterday, nearing an
Harbour Asset Management spokesman Christian Hawkesby said
markets faced a period where it might be harder than usual to
gauge the performance of the US economy. Some economic
statistics were still unavailable and others skewed by the
temporary effects of federal workers leaving and returning to
''This will put a greater onus on other indicators of
economic momentum. We have now entered the US earnings season
and some of the strength of US equities overnight was due to
companies beating earnings expectations.''
Ratings agency Standard & Poor's said the partial US
government shutdown had taken $US24 billion ($NZ28.5 billion)
out of the economy and would cut growth in the fourth quarter
S&P warned of more possible damage if the political
battle over the budget and debt ceiling resumed in January,
further scaring consumers, especially government workers laid
off without pay during the shutdown.
The impact of the two-week-old shutdown would take about 0.6%
off fourth-quarter growth.
That would leave annualised growth in the October-December
period at close to a sluggish 2% rate, the ratings agency
The fall in growth was mostly due to the furlough of hundreds
of thousands of civil servants, as well as affected
government contractors, because the Congress could not agree
a budget for the 2014 fiscal year that began October 1.
The civil servants had not been paid for their weeks off, but
Congress was expected to reinstate their wages.
With that money back in their pockets, some economists had
forecast a bounce-back in the economy in the first quarter.
But S&P pointed out the deal reached tentatively in
Congress would fund the Government only until January 15, and
raise the debt ceiling to February 7.
''That portends, potentially, a fresh political crisis over
both, and could frighten consumers from spending during the
first quarter as well.
''The bottom line is the government shutdown has hurt the US
economy,'' S&P said.
''If people are afraid that the government policy
brinkmanship will resurface again, and with it the risk of
another shutdown or worse, they'll remain afraid to open up
their cheque books. That points to another humbug holiday