Standard and Poor’s 500 closes in record territory
Standard and Poor’s 500 stock index closed at an all time high on Thursday at 1569.19. The Wall Street Journal believes the rally comes as investors warm to stocks for the first time in many years since the onset of the Recession. Recently the Standard and Poor’s has lagged the Dow because of the influence of Apple, which had shed a third of its value since September 2012. Apple is a sizeable component of the Index. The markets are closed on Good Friday.
China, South Korea and Japan may create free trade deal
Similar to the free trade deal being discussed by the EU and the US, but twice the overall size, China, Japan and South Korea are beginning to discuss a free trade deal. According to the Associated Press, progress will be slow since often the countries have acrimonious relationships and it took ten years to begin the talks. Trade between the three countries totaled $684 billion in 2011, an increase of five times from 1999. A first round of talks has been completed and a second round will occur this summer. The auto industry is expected to be an especially sensitive area.
Obama to require cleaner gas
The Obama administration is moving forward with tough new standards to cut pollution from cars that will raise the cost of gasoline by at least 10 cents per gallon. According to the Wall Street Journal, the Environment Protection Agency wants to reduce the amount of sulfur in gasoline to an average 10 parts per million, down from the current standard of 30 parts per million. The new rule was expected last year but was withdrawn since Republican criticism that Obama’s policies were hurting consumers was detrimental to his campaign. The American Petroleum Institute predicts that it will impact the cost of gasoline as only 29 refineries can currently process gas in this manner and more than 80 will be required to make modifications of various types. This new rule will overturn the original rule created by the Clinton administration. It is seen as a fig leaf to Obama’s environmentalist supporters.
Chinese regulators attack Apple
The Chinese government has intensified a public campaign against Apple, painting the company as “dishonest”, “greedy” and “incomparably arrogant”. According to the Financial Times, the Chinese say they will take regulatory action against the company if it does not improve its after sales product service. Experts, however, believe that some of the rhetoric may be because the Apple servers are not in China and therefore the government is not able to impose its usual censorship. Additionally, other analysts have suggested the government is hoping to undermine the dominance of Apple and other global companies in the Chinese market to benefit domestic companies. China is Apple’s second biggest market and is anticipated to become its largest market in the future. Apple’s Chinese sales in the fourth quarter of 2012 topped $7.3 billion. The negative campaign began on March 15, China Consumer Rights Day, in which a television program traditionally assaults a company, ultimately damaging its reputation. Last year, McDonalds suffered from the negative campaign.
Google to introduce delivery service
Google is soon to create a new service called Google Shopping Express which will initially provide same day delivery of food and other products bought online by a small group of consumers in San Francisco and its southern suburbs. According to USA Today, if the pilot goes well, Google will open the program in other markets. The delivery service is part of Google’s effort to increase consumer reliance on the internet and will increase the need for online ads, which Google will benefit from. Having to wait several days for delivery has been identified as one of the biggest challenges to internet shopping.
France may hit companies with 75 percent wealth tax
CNBC is reporting the French President Francois Hollande declared on Thursday that companies will be required to pay a 75 percent tax on salaries over a million euros after his original plan for a “super-tax” on wealthy individuals was knocked down by the French courts. Hollande is trying to re-establish his base support while the French economy remains challenged with a 10.6 percent jobless rate. He indicated that no new taxes would be placed on individuals. Currently, his approval rating is only 27 percent, a year prior to the election.
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.