Chinese manufacturing activity increases
Positive news from China where a key private sector indicator, the HSBC Flash Purchasing Managers Index or PMI, rose to a five month high of 49.5 in July. The PMI was 48.2 in June. A reading above 50 indicates activity is expanding and one below signals contraction. According to CNBC, the Chinese economy has yet to turn with experts pointing out that the employment sub-index fell to 47.4 in July, down from 48.8 in June, its lowest reading since March 2009. Asian markets and European markets were both mixed on Tuesday. The Dow closed down 101 points on Monday ending at 12,721.
Moody’s lowers Germany’s outlook despite their protests
On Monday, Moody’s credit rating service lowered the outlook to negative for the Aaa credit ratings of Germany, the Netherlands and Luxembourg. Bloomberg reports that Germany and Luxembourg have criticized the downgrade indicating that Moody’s is focused on the short term while longer term fundamentals are strong. Moody’s indicated that the outlook downgrade was necessary due to the fact that the likelihood that Greece may leave the EU has increased. Additionally, Moody’s indicated that collective support for countries such as Spain and Italy may be necessary.
Drought forces ranchers to sell cattle
The Associated Press reports that cattle are streaming into auctions across the country as ranchers are forced to sell the animals due to the drought. The drought has shriveled pastures and driven up the price of corn to feed the animals. Beef will show up in stores in November and December, temporarily driving prices down but expect prices to increase thereafter. This year’s drought is much wider than in the past.
Cigarette stocks continue to perform
Despite the fact that fewer Americans are smoking, cigarette makers Altria Group, Reynolds American and Lorillard continue to have strong earning. In fact, according to the Wall Street Journal, they have beaten the market over the past five years between 98 and 128 percent. Average dividend yield is 4.7 percent, three times the yield on a US Treasury. These companies dole out 90 percent of their earnings compared to 28 percent which is the average for other companies on the S&P. So while subject to criticism for their products, they continue to quietly deliver for shareholders.
Inspectors arrive in Greece today
Inspectors from the international lenders, the International Monetary Fund, the European Commission and the European Central Bank, all arrive in Athens today to determine whether Greece should be able to keep its $157 billon loan. According to CNBC, Greece has fallen behind on its targets due to three months of political upheaval in the country. Additionally, Greece has experienced a deeper recession than anticipated. By the end of this year, its economy will have shrunk about a fifth compared to 2008. The new government is under pressure to renegotiate the terms of the bailout. The lenders will stay for as long as needed with some predicting the visit will last more than a week.
Ferraris may bring in $20 million at auction
An auction of four rare Ferraris to be held at Pebble Beach may bring in almost $20 million, according to CNBC. The cars were owned by collector Sherman Wolf and include a 1953 34 MM Competition Spider by Vignale, a 1957 Ferrari 500 TRC, a 1985 Ferrari 288 GTO, and a 1960 Ferrari 250 GT Spider Competizione. Many are described as some of the best sports cars of all time.
DreamWorks buys Classic Media
DreamWorks Animation is paying $155 million for Classic Media, the owner of “Casper the Friendly Ghost”, “Lassie”, “Rocky & Bullwinkle” and “The Lone Ranger”. CEO, Jeffrey Katzenberg, says the Classic Media is complementary to DreamWork’s animation business. Classic Media has 80 employees and $82 million of annual revenue.
Catherine S. McBreen is President of Millionaire Corner. McBreen plans and develops content for Millionaire Corner. Catherine balances editorial content to meet the informational needs of both new and seasoned investors. She designs special monthly surveys on topical issues affecting the economic environment.
McBreen has a B.S. in speech communications from Northwestern University and a J.D. from DePail University College of Law. She is a member of the American Bar Association, the Illinois Bar Association, and the Chicago Bar Association.
Well-known for her expertise in the affluent and retirement arenas, McBreen is a frequent speaker at industry conferences. She has been quoted widely by the financial media, including The Financial Times, The Wall Street Journal, Research, Private Asset Management, On Wall Street, Reuters, Bloomberg News, The Dow Jones Newswires and Worth. Cathy has appeared as a guest on CNBC Closing Bell, First Business Morning News, Neal Cavuto at Fox Business News, ABC and CBS radio.
McBreen is co-author with Spectrem President George H. Walper, Jr. of the book "Get Rich, Stay Rich, Pass It On: The Wealth-Accumulation Secrets of America's Richest Families" (Portfolio, January 2008)
Catherine is the mother of four and is involved in many school and community events.