Wall Street blind to global risks

<p>Kia ora,</p><p>Welcome to Tuesday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.</p><p>I'm David Chaston and this is the international edition from Interest.co.nz.</p><p>And today we lead with news global financial markets are still assuming the Gaza-Israel flare-up won't affect them.</p><p>On Wall Street analysts are betting the American economy is actually operating better than they had been assuming. And tech stocks are rising ahead of earnings reports that are assumed to be strong. Consumer stocks are rising as well. The S&P500 is higher as are bond yields as eyes turn to how the US Fed will assess this continuing strength. The wisdom of ignoring global pressures is not front-of-mind there at present. A higher risk appetite seems an odd reaction in the circumstances.</p><p>In New York State however, <a href="https://www.newyorkfed.org/medialibrary/media/Survey/Empire/empire2023/ESMS_202310.pdf?sc_lang=en&hash=EEEDAF32F2202FEC2F636D62B8041A81" target="_blank"><strong>business activity edged lower</strong></a> in their factories. This was the seventh monthly fall in the past year, one that has essentially oscillated around a steady state. This time new orders were a little soft, but employment held up. That was probably because looking ahead, firms remained relatively optimistic about the six-month outlook</p><p>In Canada, <a href="https://www150.statcan.gc.ca/n1/daily-quotidien/231016/dq231016b-eng.htm" target="_blank"><strong>wholesale sales</strong></a> rose +2.3% in August, led by machinery and equipment. This was a good bounce-back from the no-change in July, although not as much as was anticipated. But the waterfront strike in Vancouver in that month probably affected this result.</p><p>And staying in Canada, higher interest rates are souring the mood of both consumers and businesses. A <a href="https://www.bankofcanada.ca/2023/10/business-outlook-survey-third-quarter-of-2023/" target="_blank"><strong>quarterly survey</strong></a> for their central bank