GDP
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Flat Consumer Spending and Declining Factory Orders Point to Slower Economic Recovery
Consumer spending in the United Sates was flat in June and personal savings were the highest in a year, underscoring how unemployment continues to hamstring the U.S. economic recovery.
Separately, U.S. factory orders fell by more than expected in June from May, and pending home sales continued to plunge as the expiration of a government subsidy for first-time homebuyers depressed housing market activity.
Taken together with the gross domestic product (GDP) data for the second quarter, the latest string of reports shows a U.S. economy that is drawing closer to a double-dip recession.
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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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Two Big Reasons to Believe the U.S. Stock Market Will Bounce Back
There's been a lot of cheerless news coming out of Europe lately, and that's taken a toll on the U.S. stock market. But I want to take this opportunity to offer up some positive points and remind investors that it's still too early to declare the bull-market dead, and even more premature to fret over a new bear market beginning.
There are two key considerations that support a continued rise in U.S. stocks:
To find out why it's too early to give up on stocks, read on... -
Global Recovery Gaining Momentum, but Obstacles Remain
The Organization for Economic Cooperation and Development (OECD) announced yesterday (Wednesday) that it has lifted its economic growth outlook, but warned that governments must enforce strict fiscal policies to sustain the global recovery and balance global expansion.
The OECD reported that the combined economy of its 31 members would grow 2.7% this year and 2.8% in 2011. Troubles of debt-plagued developed economies will be offset by the rapid economic growth of emerging markets. The numbers have been revised upward from November predictions of 1.9% growth in 2010 and 2.5% growth in 2011.
The OECD estimated global gross domestic product (GDP) would rise 4.6% this year and 4.5% in 2011, up from the previous expectation of 3.4% and 3.7%, respectively.
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U.S. Dollar 'Extremely Overbought' Says Market Researcher
The euro, which made huge gains against the dollar in the wake of 2008's financial crisis, has come plummeting back to earth amid fears that the Greek credit crisis would spread and undermine the European Union (EU). The euro's decline has meant a sharp rebound for the dollar, which according to respected market researcher Bespoke Investment Group LLC, is now "extremely overbought."
The euro has plunged some 21% versus the dollar from its all-time high back in 2008, Bespoke says. And while it is still above its historical average of $1.183, it is currently less than 2% above its 2008 low.
Meanwhile, the U.S. Dollar Index has rallied over 14% since its short-term lows in November, and it is up 3.5% this week alone.
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A V-Shaped Recovery? Don't Bet On It
Corporate profits appear to have returned in full, manufacturing is picking up around the world, commodities prices have rallied and the Standard & Poor's 500 Index is up about 60% since last March.
That makes a pretty compelling case for what some analysts are calling a "V-shaped" recovery. But even with all the momentum the economic recovery has accrued, that kind of talk may be a bit premature.
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Six Ways to Profit as Brazil's Economy Takes Off
Is Brazil one of the best emerging markets? Should it be in your portfolio? Martin Hutchinson breaks down the pros and cons of investing in the Brazilian economy. And, he's not as bullish as you might think. Find out the best ways to play Brazil in this report.
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IMF Proposes "Fat Cat" Taxes on Banks to Pay for Future Financial Crises
The International Monetary Fund (IMF) is proposing that Group-of-20 (G20) nations levy two separate taxes on banks, including a "Fat Cat" tax on profits and compensation to pay for the costs of any bailouts resulting from future financial crises.
"Expecting taxpayers to support the [financial] sector during bad times while allowing owners, managers and/or creditors of financial institutions to enjoy the gains of good times misallocates resources and undermines long-term growth," the IMF wrote in a briefing paper for the G-20 industrialized and developing countries, obtained by The Wall Street Journal.
The report proposes a tax - called the Financial Activities Tax (FAT) or "Fat Cat" tax - that would be levied against financial institution balance sheets, profits and compensation. It would be paid into a nation's treasury to help finance the broader costs of a financial crisis, The Journal reported.
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World's Factories Manufacturing at Record Rates, Fueling Global Economic Recovery
The world's factories are churning out products at record rates, fueling the global economic recovery at a faster pace than thought possible just a few months ago.
The latest figures show factory output is growing at a record rate from the United States to China to Europe and beyond. And as manufacturing expands, economists expect the world's economies to continue to expand, creating jobs and putting money in consumer pocketbooks.
As long as companies have plenty of cash to finance expansion, output from the world's factories should continue to grow, according to Money Morning Contributing Writer Shah Gilani, who recently launched the Capital Wave Forecast, a new trading service based on capital flows.
Recent surveys show U.S. companies are sitting on almost $1 trillion in cash.
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China's Explosive GDP Growth May Force Government to Raise Yuan and Interest Rates
China's economy raced ahead in the first quarter at the fastest pace in almost three years, underscoring concerns about overheating and prompting speculation that the government will be forced to raise interest rates in addition to scrapping the yuan's peg to the dollar. China's gross domestic product (GDP) rang up unexpectedly strong annual growth of [...]
