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News Analysis for the Investor on March 13, 2014

 Positive retail sales and lower jobless claims will provide an upbeat start for the markets.  Pimco, the investment management giant, has suffered significant outflows in the past year and those outflows are continuing in 2014.  Retailers continue to close brick-and-mortar stores and China's growth is slower than expected.  Starbucks has now added the ability to tip your barista onto its digital app.

| BY Catherine McBreen



Retail sales rebound in February

The Associated Press is reporting that US retail sales bounced back in February after suffering a decline in January.  The Commerce Department says that seasonally-adjusted retail sales rose 0.3 percent in February.  Spending had fallen 0.6 percent in January and 0.3 percent in December.  The increase suggests that consumer spending has started to recover after being impacted by the harsh winter weather.  Excluding volatile spending on autos, gas and building supplies, retail sales increased 0.3 percent from December.  The February rebound almost brought retail spending back to December levels.  Purchases in restaurants,through online retailers and department stores also improved.  Over the past 12 months, retail sales have risen 1.5 percent.


Jobless claims slide to new 3-month low

According to CNBC, the number of Americans filing for new claims for unemployment benefits unexpectedly fell to a fresh three-month low last week.  Initial claims for state unemployment benefits dropped 9,000 to a seasonally adjusted 315,000, according to data from the Labor Department.  That was the lowest reading since late November.  Economists had predicted that applications would be at 330,000. 


Slow Chinese growth worries markets

According to the Financial Times, the depth of China’s downturn has surprised most of the analysts this year.  Industrial output slowed to 8.6 percent year on year in the first few months of 2014, down from 9.7 percent in December and missing forecasts of 9.5 percent.  It was the lowest reading since August 2009.  Property sales, which in the past have served as a leading indicator, fell 3.7 percent year on year, down from last year’s increase of 26.3 percent.  China’s parliament indicates that it is aiming for 7.5 percent growth.  While the government is willing to accept slower growth and is becoming more flexible, it will only let the economy slip so far.  In the past month they have guided the renminbi down against the dollar.


Pimco experiences $2.5 billion monthly outflow

Global investment management firm Pacific Investment Management Company (PIMCO) underperformed its peers last month and was the only provider among the top 10 firms that experienced outflows.  CNBC reports that Pimco had $518 billion of assets under management last month with 4.6 percent market share.  An estimated $2.49 billion left in January and a total of $56 billion left last year.  A year ago, Pimco’s assets under management stood at $583 billion, reaching a peak in May of $590 billion before falling.  This is in contrast to its competitors Franklin Templeton, Fidelity and Vanguard, all of whom have seen their assets increase in the last 12 months.


Nine retailers closing brick-and-mortar stores

Radio Shack recently announced that it will be closing 1,000 stores.  During the last few years, Gap has closed 20 percent of its locations and even Macy’s has closed some stores.  USA Today has identified the nine retailers closing the most stores.  These stores include the following: 1. Abercrombie and Fitch 2. Barnes & Noble  3. Aeropostale 4. J.C. Penney 5. Office Depot  6. Radio Shack  7. Sears Holdings  8. Staples and  9. Toys “R” Us


Starbucks adds digital tipping

Starbucks will be adding the ability to tip its baristas via their iPhone app beginning on March 19thUSA Today reports that customers that use their cell phones for payment – and do not carry cash – have been unable to tip up until this time.  Nearly 10 million Starbucks customers use the digital app.  The initial barista tip options will be 50 cents, $1 or $2.

About the Author

Catherine McBreen

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.