Manufacturing output is up to highest level in 6 months. Alibaba to pay all underwriters similarly for its IPO. China allowing people to move to cities. And on this St Patrick's Day…there is fear of a summer pork shortage due to a pig virus and Guinness won't be sponsoring New York City's Parade because it did not include the LGBT population
Manufacturing output gains above expectations
CNBC is reporting that US manufacturing output rebounded more than expected in February and recorded its largest increase in six months. Factory production increased by 0.8 percent last month, its largest increase since August. In January, production declined 0.9 percent, which was the largest drop since May 2009. Economists had expected the manufacturing output to rise 0.2 percent. Last month, the amount of industrial capacity in use increased to 78.8 percent from 78.5 percent in January. Industry capacity utilization, a measure of how fully firms are using their resources, was 1.3 percentage points below its long-run average. This indicates that there is still some “slack” in the economy.
Alibaba chooses New York for its IPO, now it chooses underwriters
Alibaba Group Holding Ltd., the Chinese e-commerce company, wants to pay the banks underwriting its IPO about the same amounts. In contrast, recent large IPOs, such as Facebook and Twitter, each paid one bank far more than others. The Wall Street Journal reports that Credit Suisse, Deutsche Bank AG, Goldman Sachs Group Inc., JP Morgan Chase & Co, and Morgan Stanley are all expected to underwrite equal amounts of the Alibaba IPO that is expected to raise $15 billion. That would mean hundreds of million of dollars in fees to the banks and to exchanges in the US. The IPO could come as soon as this summer.
China announces plan to expand cities
According to the Associated Press, China has announced plans to expand its cities and improve public services to support economic growth by allowing millions more rural residents to migrate to urban jobs. Right now, about 53.7 percent of the 1.4 billion people in China live in the cities. The Cabinet announced on Sunday that it would allow 60 percent of the population to live in the cities, a shift of about 90 million people. Longer term, authorities expect 300 million people from the countryside to become city dwellers by 2030, the equivalent of the migration of the entire US.
Pig virus impacts hog prices
Hog prices are at record highs on the Chicago Mercantile Exchange due to fear about the Porcine Epidemic Diarrhea virus on the nation’s pig industry. Reuters indicates that the virus was detected a year ago and has killed an estimated 6 percent of the hog population. On March 28 the US Department of Agriculture will release its quarterly hog report and it will include the PEDv impact over the last three months and a supply forecast into June. The virus has been confirmed on 4500 farms in 27 US states. Wary of a sharp meat shortage during the summer grilling season, hog processors have bid up prices since the year began with hog prices at nearly $1.20 per pound compared to 85 cents a year ago. Expect your hot dog or brat to cost more this summer.
Guinness withdraws support from New York’s St. Patrick’s Day Parade
The Financial Times indicates that Irish brewer Guinness says it will not participate in today’s New York City St. Patrick’s Day parade because gay and lesbian groups have been excluded from the event. Guinness’ decision comes after Boston Beer, brewer of Sam Adams, pulled out of the Boston St. Patrick’s Day Parade, and Heineken pulled out of participation in the New York parade. It is anticipated, however, that green beer will still be in ample supply.
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.