China becomes the world's largest economy. Manufacturing beats expectations but jobless claims increase unexpectedly. Dow sets its first 2014 record. Exxon earnings slip. IMF approves aid to Ukraine. Subway in UK and Ireland tailors menu for Muslim customers.
Manufacturing Index beats expectations
CNBC is reporting that the ISM Manufacturing Survey Index, which was expected to rise to 54 in April, actually hit 54.9, beating economists’ expectations. The Index rose from 53.7 in March. Construction spending rose by 0.6 percent in March versus the previously reported 0.1 percent gain.
China becomes the world’s largest economy
According to the Financial Times,in a report released this week by the International Comparison Program, under the auspices of the World Bank; China will usurp the US as the largest economy in the world this year. The US has had the largest economy in the world since 1872. The Chinese did not want the report released because they believe it would put greater international responsibility upon the country, a role that it is not ready to take. Currently, China’s 1.36 billion people are relatively poor with their per capita purchasing power ranking 99th in the world. The US ranks 12th.
Dow closes in record territory for the first time in 2014
The Dow Jones Industrial Average closed in record territory for the first time in 2014, rising 45.47 points to close at 16,580.84. According to the Wall Street Journal, this is 4.18 points higher than its previous peak on December 31, 2013. Last year, the Dow broke its own historic high more than 52 times. The S&P has generally had stronger performance than the Dow in 2014. It is up 1.9 percent this after posting a 30 percent increase in 2013. The Dow is only up 0.3 percent this year. A big hurdle for the Dow this year has been the slowdown in corporate earnings growth. Additionally, some of the highest-weighted and highest-priced stocks on the Dow, such as Goldman Sachs, Visa and Boeing, have been laggards in 2014.
US jobless claims jump along with spending and income
CNBC is reporting that initial claims for state unemployment benefits increased 14,000 in the past week to a seasonally adjust 344,000. This is the highest level since February. Economists had expected the applications to fall to 319,000. The number of individuals receiving aid increased to 2.77 million in the week ending April 19. Planned layoffs jumped 17 percent in April. In a separate report, US consumer spending recorded its largest increase in four and a half year in March. Consumer spending rose 0.9 percent in March, the biggest increase since 2009. Income increased 0.5 percent in April, the largest gain since August.
Exxon earnings slip on lower production
Exxon Mobil said Thursday that its net income fell 4 percent in the fourth quarter as it produced less oil and natural gas and posted weaker refining results. The Associated Press is reporting that cost cutting and higher prices for oil and gas helped the company beat Wall Street expectations. Exxon earned $9.1 billion in the first three months of the year. Revenue was $106.77 billion. During the same period last, earnings were $9.5 billion and revenue was $108.36 billion. On a per share basis, Exxon earned $2.10 compared to $2.12 a year ago. Exxon has been trying to reduce costs to reallocate spending into the development of large new oil and gas projects the will replace the natural declines to existing oil fields.
IMF approves $17 billion of aid for Ukraine
The International Monetary Fund, or IMF, has approved a $17 billion emergency rescue package to prevent a collapse of Ukraine’s economy. The Wall Street Journal reports that the signoff on Wednesday also allows an additional $15 billion in international financing, including loans and other funding from the U.S., Europe and the World Bank. The new government will be able to tap $3 billion of the IMF funds within the next few days. Russia was also involved in the approval of the loan because, whatever the future outcome, the IMF loan will help to prevent the failure of one of its most important trading partners and will ensure that billions of dollars in past-due energy bills are paid to Russia.
UK and Irish Subways ban ham under pressure from Muslim customers
Some 185 of the estimated 1700 Subway stores in Great Britain and Ireland have eliminated ham and bacon from their menus in response to requests from Muslim customers. USA Today reports that Subway, the world’s largest sandwich maker, indicates that after strong interest from its Muslim customers in these locations, it has introduced halal meat as a replacement. There are currently no plans for stores in the US to serve halal meat. Muslims are forbidden from eating any non-halal food and meat from pigs. Pork is forbidden and while other meat can be eaten, it must be sourced, slaughtered and processed according to strict rules. Subway indicates that all halal meat served in UK and Ireland will follow the appropriate protocols.
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.