Turkish stock market plunges due to protests
Turkey’s stock exchange has fallen sharply on Monday after three days of anti-government protest, according to the Associated Press. The Borsa Istanbul 100 Index fell 6.43 percent as investors worry about the impact of the demonstrations on the economy. The rallies are protesting the 10 year rule of Prime Minister Recep Tayyip Erdogan.
China’s PMI at lowest point since October
China’s factory activity fell for the first time in seven months in May to 49.2, the lowest level since October 2012 and down from 50.4 in April, according to CNBC. The HSBC/Markit Purchasing Index reflects manufacturing activities. A number below 50 shows the economy is shrinking while a number above 50 reflects growth. The data supports worries that the Chinese economy is slowing. The Chinese government’s official PMI, however, ticked up in May to 50.8. The HSBC/Markit PMI showed that new orders slipped to 48.7, the lowest since last September suggesting weaker demand for orders due to weak economies in Europe and the U.S.
Risk parity funds grow in popularity
Risk parity funds have attracted $30 billion in the last four years, with $16 billion gained in just the past 12 months. USA Today reports that risk parity funds are designed to provide strong risk adjusted returns regardless of what happens with the economy. While overall returns aren’t impressive, the tradeoff is that they are safer should a downturn occur. For example, this year sample funds have gained between 6.7 percent and 3.4 percent compared to the 16 percent return of the Standard and Poor’s 500 Index. While often described as similar to a balanced fund, one of the ways that risk is equalized is through the use of leverage and derivatives. Experts recommend that investors discuss these funds with a financial advisor.
Germany to help small Spanish businesses
The Associated Press is reporting that the German government will guarantee a bilateral loan facility worth $1.3 billion to help small and medium sized firms in Spain. Low interest rate loans will be funneled through Germany’s state owned KIW bank that will allow its Spanish counterpart ICO to make low interest loans.
LVMH turns to make-up as handbag sales dip
LVMH, the owner of high end companies from champagne to Louis Vutton handbags to make-up, is seeing growth in its Sephora line, according to Bloomberg. LVMH in April reported its weakest fashion and leather goods sales in more than three years causing its shares to fall 1.3 percent last week While luxury good sales are slowing, growth is occurring in its middle class goods such as Bobby Brown cosmetics and Johnnie Walker whiskey. Sephora, another mid-level line, provides a broad range of skincare products and its has become the world’s biggest beauty retailer. Sephora has 27 percent of the beauty market in France, 12 percent in the US and 15 percent in China. It is expected to grow world-wide. Mid-level brands owned by LVMH are expected to grow at three times the pace of the luxury goods through 2017.
Kids eating fewer sweets
A USA Today survey shows that children are eating fewer sugary sweets than they did 15 years ago, and the numbers of healthy eaters are accelerating. The typical child in 2012 ate or drank the 20 most common sugary sweets an average 126 times fewer than in 1998. That includes 62 fewer carbonated soft drinks and 22 fewer times eating pre-sweetened cereals. The numbers are based on diaries kept by 5,000 people living in 2,000 households conducted by specialist group NPD. Across every category of pre-sweetened food, except yogurt and fruit snacks, children are consuming less. Carbonated soft drinks, pre-sweetened cereals and fruit drinks and juices are all seeing double-digit declines. Despite the changes, childhood obesity has increased from 7 percent in 1980 to 18 percent in 2010. Children still consume 14 percent more sweet things annually than adults.
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.