Weekly Roundup – Week 40/2013

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Welcome!

Welcome to our brand new “weekly roundup” – our complimentary summary of this week’s financial news.  This publication includes my own commentary and index of links to articles, allowing you to scan over and tune into what’s important to you.

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Dermot.

Irish Economy

Commentary:

This week’s news is in general positive with the following news headlines suggesting an overall continuation of marginal growth and activity in the economy.

There are encouraging signs that consumers are more willing to spend their well earned cash notwithstanding the upcoming Budget, which this week we were advised won’t be as bad as originally planned (adjustment of perhaps €2.7bn approx. rather than €3.1bn). (See Taxation below) We shall have to wait until 15 October 2013 to see the final figures.

News headlines:

  • “Consumer sentiment at six year high in September” (http://www.rte.ie/business – 30 September 2013)
  • “New car sales 7% lower so far this year – SIMI” (http://www.rte.ie/business – 1 October 2013)
  • “Manufacturing sector continues to grow in September” (http://www.rte.ie/business – 1 October 2013)
  • “Services sector expands for 14th month in a row in September, but at a slower rate” (http://www.rte.ie/business – 3 October 2013)
  • “Industrial production fell 7% in year to August” (Irish Times Business – 5 October 2013)
  • “Foreign investment flow into Ireland up by €13bn last year, says CSO” (Irish Times Business 5 October 2013)
  • “Employers unhappy with JLC reforms” (Sunday Business Post – 6 October 2013)
  • “Final figures for Quarter 3 of this year revealed a 24% drop in Irish company insolvencies and a 15% increase in company start-ups.” (Business Barometer – http://www.vision-net.ie/barometer.jsp)

Global Economy

Commentary:

The Global economy also had good news stories this week with the EURO zone economy returning positive results in regards to inflation and unemployment. However a Government shutdown could cost the still-struggling U.S. economy roughly $1 billion a week in pay lost by furloughed federal workers.

News headlines:

Banking / Credit

Commentary:

The main news this week is the decision by the ECB to keep its main lending rate at 0.5%. This is good news for mortgage holders, particularly those you have been able to keep their low rate tracker mortgages. Also there was little disquiet from the IMF regarding PTSB delay in returning to profitability.

News headlines:

  • “ECB holds interest rate at 0.5%” (http://www.rte.ie/business – 2 October 2013)
  • “IMF warning over PTSB profit deadline” (Irish Times Business – 5 October 2013)
  • “Banks more aggressive chasing homeowners than BTL investors” (Sunday Business Post Money – 6 October 2013)

Taxation

Commentary:

The good storey news storey of the week must be the announcement that the Budget “adjustment” will be “somewhat less” at around €2.8bn than originally planned at €3.1bn. We will have to wait until Budget day, 15 October 2013, to see how this “adjustment” is made. However the IMF says new budget measures should minimise drag on demand and job creation, so it recommends spending cuts over tax rises. It says the Government has told it that on the spending side it is seeking to better target social supports and subsidies, get savings through public service reforms, and continue targeted capital investments.

News headlines:

“Minister Michael Noonan says Budget adjustment will be ‘somewhat less’ than €3.1bn” (http://www.rte.ie/business – 2 October 2013
“IMF says Budget 2013 measures should minimise drag on job creation” (http://www.rte.ie/business – 4 October 2013)

Stock Market

Commentary:

There was little change in the main markets in a subdued week with Italy’s FTSE MIB the best performer.

  • Italian stocks star on flat day in Europe
  • Dublin Iseq up 0.4%
  • UK FTSE 100 up 0.1%
  • European Stoxx 600 index up 0.1%
  • US Standard & Poor’s 500 Index