Upbeat investors shrug off 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 investors are upbeat, positioning that the economic threats will mostly be diffused.</p><p>First up today, a look at the <a href="https://insight.factset.com/sp-500-earnings-season-update-august-4-2023" target="_blank"><strong>US Q2 corporate earnings being reported</strong></a>. So far Q2 earnings for the S&P 500, are down sharply from the same period a year ago. But both the number of companies reporting positive earnings surprises and the magnitude of these earnings surprises are above their 10-year averages. So as the current Q2 earnings reporting builds, more results that are better than expected are coming through. This is helping keep Wall Street equity trading in an upbeat mood. And Warren Buffet's company is one of those and has <a href="https://www.berkshirehathaway.com/qtrly/2ndqtr23.pdf" target="_blank"><strong>posted</strong></a> record results.</p><p>But <a href="https://www.reuters.com/article/usa-bonds-property/delinquency-rates-on-u-s-office-loans-rise-moodys-finds-idUSL1N39L2ME" target="_blank"><strong>the threat from commercial real estate revaluations</strong></a> keeps on building and has the potential to rock Wall Street at some point.</p><p>American consumers are facing sharply lower inflation now. It came in at 3.0% in June and we will get the July rate on Friday NZT. Analysts expect that to inch up to 3.3% then although recent data on <a href="https://www.coxautoinc.com/newsroom/?category=press-releases#categories" target="_blank"><strong>used car prices</strong></a> have them down almost -12% from a year ago. Now research at the San Francisco Fed shows that "<a href="https://www.frbsf.org/economic-research/publications/economic-letter/2023/august/where-is-shelter-inflation-headed/" target="_blank"><strong>shelter inflation</strong></a>" may