THE NEWS WRAP: Business conditions and housing industry confidence up in the US

Confidence among builders in the troubled US housing sector and general business conditions in the world’s largest economy are up, according to two leading market indexes released overnight.

 

The National Association of Home Builders/Wells Fargo Housing Market index, which measures confidence among home builders, jumped to 52 in June from 48 in May, with a number over 50 meaning more builders see business conditions as favourable than poor.

 

Meanwhile, the New York Fed’s “Empire State” general business conditions index rose to 7.84 from -1.43 in May, where a reading over zero indicates expansion, although the report is not entirely positive.

 

“Sentiment may be improving but actual output isn’t improving. This report suggests manufacturing activity is sluggish and that we are seeing that in the US and the rest of the world,” says senior Bank of America Merrill Lynch economist Michelle Meyer.

 

AirAsia founder plans to retune the Australian insurance and hotel markets

 

AirAsia founder Tony Fernandes has opened up a national headquarters for his Tune Group in Melbourne, with ambitious plans to expand into the no-frills accommodation and insurance markets.

 

Fernandes has also announced plans to open his first Tune Hotel in Melbourne, where guests will be offered a low-cost hotel room for a budget price but will be charged extra for air conditioning, television, daily room cleaning and towels

 

“Tune provides a whole new market that we don’t perhaps provide for as well as we should in Melbourne and Victoria. I think it will significantly increase the number of people that travel and stay in Melbourne,” Victorian Premier Denis Napthine says.

 

“We have a good brand and we have a bit of a captive market with the people who travel with us on travel insurance. Insurance is marketed in a very old-fashioned way. “I think people want choice and to tailor make their insurance a bit, depending upon their lifestyle,” Fernandes says.

 

NAB boss expects Australia to avoid a recession

 

National Australia Bank chief executive Cameron Clyne has revealed during an interview with The Australian he expects Australia to avoid a recession.

 

“We have this national gloom hanging over us. When the unemployment figures come out, no one believes them but they are quite robust. They are real,” Clyne says.

 

Clyne cited the reaction to a recent Goldman Sachs report showing Australia has a 20% chance of recession next year as another example of the “national gloom”, pointing out that in the US more attention would be paid to the 80% chance of avoiding recession.

 

Overnight

 

The Dow Jones Industrial Average is up 0.73% to 15,180.08. The Aussie dollar is down to US95.66 cents.

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