Archives for August 2010

August 2010 - Page 10 of 10 - Money Morning - Only the News You Can Profit From

China Manufacturing Slowdown Not Enough to Cause "Double Dip"

The China manufacturing sector expanded at the slowest rate in 17 months in July, showing the government's efforts to tighten lending is weighing on the country's economy. But the Asian juggernaut is still posting strong enough growth to keep the rest of the world out of a "double dip" recession.

The HSBC China Manufacturing Purchasing Managers' Index released Sunday showed activity fell to 49.4 in July from 50.4 in June. A reading above 50 signals expansion, indicating manufacturing activity actually contracted for the first time since China's economic recovery began.

The HSBC PMI's reading was the first below 50 since March 2009. Measures of output, orders and export orders all showed contractions. Another measure, the official government PMI released yesterday (Monday), fell to 51.2 in July from 52.1 in June, the third straight month it has declined.

"We're in a moderate slowdown, not a double-dip," Ken Peng, a Beijing-based economist for Citigroup Inc. (NYSE: C) told Bloomberg News.

Similarly, HSBC Holdings plc (NYSE ADR: HBC) economist Qu Hongbin said China is having a "slowdown not a meltdown" and "there is no need to panic."

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BP's Offshore Plans Spark Talk of Drilling Ban Among Concerned European Nations

BP PLC's (NYSE ADR: BP) plans to drill for oil and gas off the coast of Libya within weeks has caused nearby European countries like Italy to sound the alarm for a drilling ban until they ensure the safety of surrounding waters.

Italy's Environment Minister Stefania Prestigiacomo was the first European Union official to suggest a drilling ban to give nations around the Mediterranean Sea time to coordinate a drilling policy.

"A moratorium could be a right approach for potentially dangerous drilling…to give Europe time to define a new and specific strategy for the Mediterranean especially in light of the risk exposed by the Deepwater Horizon spill," Prestigiacomo wrote to the Financial Times.

BP has a rig in Libya's Gulf of Sirte, about 500 kilometers from Italian and Maltese territory. The first of five planned wells will be about 200 meters deeper than the Macondo well that spewed as much as 184 million gallons of oil into the Gulf of Mexico for almost three months.

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Buy, Sell or Hold: Peabody Energy Corp.'s (NYSE: BTU) Global Dominance Is Heating Up Profit Growth

While advanced economies are still facing high levels of unemployment, more than a billion people in emerging markets are experiencing advancing standards of living.

As these emerging economies – especially China and India -grow, there is a strong trend toward urbanization. People are leaving the countryside for the cities in droves in order to reap the promise of the global economy. This secular process alone places huge demands on the existing infrastructure.

This growth is also boosting manufacturing and energy needs. China has surpassed the United States in both car production and energy consumption. And India's Tata Motors Ltd. (NYSE ADR: TTM) launched the cheapest car in the world, the Nano, which costs roughly $2,500. The critically acclaimed vehicle's mass appeal and affordability is creating additional congestion on India's famously overcrowded streets. Adding more fuel to the global-demand fire, most emerging economies implemented a strong dose of infrastructure spending within their budgets as a result of the global financial crisis of 2008.

The result of all that infrastructure development, urbanization and increased consumer affluence is a myriad of new road, bridge and building construction, additional urban development, and stepped-up production of cars, home appliances and other consumer goods. All of these developments require two key ingredients to become reality: Steel and energy.

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Wall Street's Mood Shift Is Signaling a Profit-Making Price Push Ahead

A mood of mild optimism has begun to spread down Wall Street not long after there was nothing but long faces. Fancy that.

More good news out of Europe, better-than-expected new home sales, and the latest of a solid second-quarter earnings season has helped resuscitate the animal spirits that were missing in action since the spring. 

Stocks rose past some key milestones in their historic July over the past week, pushing the Dow Jones Industrial Average just barely into positive territory for the year. It was a very professional, low volatility rally this week, a welcome change from the intra-day dramatics that had put everyone on edge lately.

What has really changed from the point of view of government policy or corporate results? Nothing and everything.

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To find out what’s changing on Wall Street, click here

China Leapfrogs Japan and is Now the World's No. 2 Economy - And is Gunning for the No. 1 United States

As the old Avis rental car slogan used to say: "When you're No. 2, you try harder."

With the growth rates that its economy has turned in the past few years, no economist could ever accuse China's leader of not trying hard. China now claims to have jumped over Japan to take over the No. 2 spot in the world economic pecking order.

China's next target: The No. 1 U.S. economy.

In fact, some experts believe that China could catch up to the United States' $14.4 trillion economy in as little as 10 to 15 years.

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