An earthquake for fossil fuel investors

<p>Kia ora,</p><p>Welcome to Friday's Economy Watch where we follow the economic events and trends that affect New Zealand.</p><p>I'm David Chaston and this is the International edition from Interest.co.nz.</p><p>Today we lead with news of a sudden change in the value of fossil fuel investments.</p><p>But first, the April <a href="https://www.census.gov/manufacturing/m3/adv/pdf/durgd.pdf" target="_blank"><strong>durable goods orders data</strong></a> in the US came in surprisingly weak. They are -1.3% lower than the March level which is far away from the +0.7% gain expected. Of course they are hugely higher on a year-on-year basis but that is just the pandemic base effect. Compared to April 2019 orders are +0.4% higher so the recovery in the factory sector is still lackluster by this metric. 2021 orders for non-defence capital goods however recorded a good +3.5% gain.</p><p>US <a href="https://www.dol.gov/sites/dolgov/files/OPA/newsreleases/ui-claims/20210963.pdf" target="_blank"><strong>initial jobless claims</strong></a> fell again, down to +420,000 last week and the lowest since before the pandemic started. There are low 3.5 mln people on these claims, well down from the 22 mln at its peak, but still well above the pre-pandemic level of under 2 mln.</p><p><a href="https://www.nar.realtor/newsroom/pending-home-sales-drop-4-4-in-april" target="_blank"><strong>Pending home sales for April fell</strong></a> when a rise was expected. Record low inventory levels are the declared reason.</p><p>The Kansas City Fed's factory survey also <a href="https://www.kansascityfed.org/documents/8113/May272021_ManuSurvey_KCFed.pdf" target="_blank"><strong>reported</strong></a> softer conditions in May than for April. But they are still reporting a strong expansion and also reporting very sharp pricing pressures, just like every other similar survey nationwide.</p><p>And we should note that the coming weekend includes the Memorial Day holiday in the US on Monday. Memorial Day weekend serves as the unofficial beginning of the US su