Number of U.S. Millionaires Still Below Pre-Recession Highs
Yesterday Spectrem Group announced that the number of Millionaires in the U.S. had climbed to 8.6 million. These households have a net worth of over $1 million, not including their primary residence. Millionaire households hit their peak at the end of 2007 at 9.2 million but took a precipitous 27 percent drop in 2008 to end at 6.7 million households. With the improvement of the stock market, the number of millionaire households is returning. Spectrem also indicated that there are 13.8 million households with $500,000 plus net worth and 36.7 million households with over $100,000 of net worth. Only 107,000 households have over $25 million of net worth.
Slow Down in Chinese Manufacturing Index Frightens Markets
The HSBC purchasing managers index that was released today shows that manufacturing in China shrank for the fifth month in a row, as reported by Reuters. The reading came in at 48.1, compared to 49.6 in February. A reading of 50 or above indicates expansion in an economy. New factory orders are at a four month low of 46.2. Despite the slower growth in the manufacturing index, China's economy is expected to have a gross domestic product of 8 percent and industrial production of 11-12 percent. While this is the slowest growth for China in over a decade, it still meets the government's goal of 7.5 percent. Markets worldwide are reacting to the slower production.
U.S. Money Market Funds Re-Investing in European Debt
The ten largest money market funds, who manage 45 percent of the money funds in the U.S. or about $1.46 trillion, increased the amount of European debt they held by 21 percent at the end of February compared to the end of January of this year. The Wall Street Journal reports that in May of 2011 they held 30 percent of their funds in European debt, which was the high point. That was reduced significantly, and even though confidence is building, they still hold 60 percent less in total European debt than in May of last year. Experts believe the worst of the crisis has been averted, however, managers are still avoiding debt from Italy and Spain.
Housing Market Begins to Breathe
The U.S. housing market may be showing signs of recovery, according to an article in the Wall Street Journal. In January the sales of existing homes was at its highest since 2007, but fell 0.9 percent in February. Still experts from Home Services, a Berkshire Hathaway Company, believe there will be 10 percent growth this year, compared to the initial flat line approach. Housing prices are about one third lower than before the recession, and with the economy picking up, people may begin purchasing again, despite the tough credit standards. The spring selling season, according to experts, is off to its best start in 5 years. Additionally, Home Depot reports that consumers are once again purchasing items to conduct major repairs.
Ford to Build $1 Billion Plant in India
Ford is pushing forward with a $1 billion factory in India that will build 240,000 cars annually and 270,000 engines for both domestic use and export, according to the Associated Press. While the numbers of Ford cars purchased in India slowed to about 82,639 cars from April to February, Ford still anticipates investing about $2 billion in India in the next few years, especially building and promoting its popular Figo brand. The gross domestic product for India dropped to 6.9 percent last year down from 8.3 the prior year. With the slowing economy, the Indian consumers have been holding back on purchases.