Asian markets closed down and European markets are also falling as the Republicans were forced to delay the vote on the debt ceiling Thursday night. The Wall Street Journal indicates that the Dow fell 62 points on Thursday closing at 12, 240. The Chinese, who hold over $1 trillion of U.S. debt, are highly critical of the U.S.
Economy grew at slowest pace since Recession in the first half of the year
In a report scheduled to be released today, it is expected to be reported that the economy grew only 1.7% compared to 2.9% last year, according to the Associated Press. RBC predicted that the forecasted growth was 2.3%. Spectrem Group/Millionaire Corner research has consistently indicated that investors have never believed the recession is over.
Unemployment applications drop below 400,000
In some unanticipated good news, the claims for unemployment in the past week dropped to 398,000 for the first time in 16 weeks, according to the Associated Press. The four week average is at 416,000. Experts indicate that sustainable claims of less than 375,000 per week will show the economy is on the mend.
Britain's borrowing costs fall below those of the U.S. for first time in 15 months
The costs for the United Kingdom to borrow fell on Thursday with the 10 year gilts, the comparative security to the U.S. Treasury, falling to 2.93%, 3 points below the U.S. Treasury, according to the Financial Times. The German bunds are currently considered even safer.
Moody's downgrades Spain
Moody's has put Spain on the list for a potential downgrade, according to the Financial Times. The downgrade is due to the increased cost of funding and the impact of the second Greek bailout. Spain's current rating is Aa2.
Inflation in Europe fell in July
Some good news for Europeans. Their inflation rate fell in July according to Eurostat therefore the European Central Bank will not need to increase rates. This was the intention for increasing rates earlier in the year. Inflation was 2.5% but was anticipated, according to the Associated Press , to be at 2.7%. The ECB is hoping to hold inflation at 2.0%.
Madoff Trust recovers $1billion from hedge fund
The Trustee of the Madoff bankruptcy recovered $1 billion from Tremont Group bringing the total recovery to $110 billion. The amount that has been recovered is more than half the $17.36 billion lost. The Wall Street Journal indicates that more than half of the total principal lost has been recovered with a distribution earlier this year returning $272 million to 1224 accounts, an average of about $222,000 per account.
Starbucks profit up 34%
The day after the IPO of rival, Dunkin' Donuts, Starbucks announced better than expected results for the end of its third quarter. Profits rose 34% to $279.1 million resulting in 36 cents per share. This is up from 27 cents per share one year ago and higher than the predicted 34 cents per share. The Associated Press indicates that Starbucks links its success to new products successfully being purchased by existing customers.