Friday 16th February 2001 |
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Commentators like the Economist are talking not about a possible US recession but about whether the downturn will be short or longer, and whether staff layoffs will deepen the problem.
The "new economy" paradigm will be sorely tested by the slowdown, as it was argued that better stock and inventory management by high technology would prevent excessive production and with it sharp drop in economic activity when demand fell.
Main US indices are hesitant. The Dow Jones industrial average is notably capped at 11,000 and the transportation index has fallen back to 3000. The Standard & Poor's 500 is drifting around 1300, while the Nasdaq is again out of favour about the 2500 level. Britain's FTSE250 is nonetheless doing a steady climb back to earlier resistance at 6800, while Sydney's ASX250 has sparked above 2700 on the Australian Reserve Bank's decision to shave base interest rates.
New Zealand's sharemarket is sailing along in a "recession, what recession?" mode. The NZSE40 has held up at the 2000 mark, while the smaller companies capital index is inching up to 5300.
Low unemployment figures are said to be likely to stay Don Brash's hand in cutting interest rates but should be viewed in the light of our persistent migration deficit.
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