Category Archives: financial news
Consumer Spending Numbers Are Skewed
Consumer spending in the U.S. rose 0.7 percent in December, more than forecast, capping its strongest quarter in more than four years, according to figures from the Commerce Department. Mike McKee and Betty Liu report on Bloomberg Television‘s “In the Loop.” (Source: Bloomberg)
Look, I am not refuting the data, but come on, really? I would say that consumer spending as a whole, is not up at all. In fact, I would say it’s down quite a bit.
First of all, look at the sources that are reporting higher sales…Coach, Tiffany’s and other high-end retailers. This is not the common household and does not represent consumer spending accurately.
Second, the reports say that manufacturing is submitting a greater number of purchase orders and that they are doing more hiring. Well, I can say that they are probably putting in orders because they want to fix their price on those orders from China and other countries, so they can benefit from today and not tomorrow. As far as employment goes, there are a lot of Fortune 500 companies that still post jobs, but don’t fill them or they fill them internally and now assign several roles to one person, where it took three people to fill those roles before.
Next time give us the real numbers that contain all of the data and not just a half truth.
FX Daily Squawk
Thin trading within major currencies has let the US Dollar extend some losses. The Euro is still losing ground against the US Dollar. Positive statements from the FOMC and relatively upbeat consumer spending data helped provide a small boost for emerging currencies. The fact that the World Health Organization has raised its threat level of the swine flu epidemic has not had a significant impact on the FX markets.
World equity markets are generally stronger today. In Asia, the MSCI Asia-Pacific index rose over 3%. The Nikkei is up about 4%. Indexes were up in Hong Kong, South Korea, India and Singapore. In Europe, the DAX is up over 18% for the month. Canada’s TSE was the first G7 equity market to be positive for 2009 so far. The S&P is up around 9.5% for the month.
FX Daily Squawk
The US Dollar and Japanese Yen are treading lower against major currencies, but today’s US GDP report may cause the US Dollar to rally. The Euro appears to be giving up some ground. Let’s see how the currency markets are affected after the FOMC meeting today. Japan was closed today for the Showa holiday.
World equity markets are holding steady. In Asia, the MSCI index closed up about 2% today. European markets are up around 1% in this morning’s trading. Early indications suggest that US markets will open slightly higher.
Fed Chairman Bernanke made comments about some improvements in the US economy and some economic data has concurred with his statements. The sentiment is that the downturn in the economy is abating. That message will likely be carried through the FOMC meeting today. Even if there is disappointment that there is not further quantitative easing, the Fed will assure everyone that it will use all of the available tools in its toolbox to address this seemingly prolonged economic crisis.
Some evidence that a global contraction is occuring, can be shown through South Korea and New Zealand, where both countries have reported improvements in exports. Overseas shipments for South Korea have increased by 10% since February of this year. That is quite a bit, considering it makes up over 50% of their GDP. These are perhaps some early signs that the world export market is beginning to stabilize, as are the US and Chinese economies…fxWorldMarkets.
