US home prices slow their rate of increase while the EU predicts anemic growth. Kelloggs plans layoffs while NYC plans Super Bowl parties.
Kellogg to cut work force by 7 percent
Kellogg Co. will cut about 2,000 jobs, or 7 percent of its global workforce, over the next four years as part of a billion-dollar cost-cutting plan. The Wall Street Journal reports that the move by Kellogg is in response to increased competition in the breakfast and snack industries. Cereal in the US is considered a challenged category for Kellogg. Third quarter earnings rose 2.5 percent on revenue that edged lower to $3.72 billion. The cost-cutting plan, dubbed Project K, entails spending $1.4 billion by the end of 2017 to relocate production lines and globally integrate internal business services that are now handled regionally.
US home prices rise at slower rate in September
US home prices rose only slightly in September, a sign that prices are leveling off after big gains earlier this year. According to the Associated Press, home prices increased 0.2 percent in September from the previous month. That is lower than the 0.9 percent month over month gain in August and well below the 1.8 percent gain in July. Prices still rose 12 percent in September compared to a year ago. Higher mortgage rates and steady price increases slowed sales in September. Home prices remain about 17 percent below the peak in April 2006.
European Union predicts low growth and high unemployment in 2014
The New York Times is reporting that the European Union expects the growth for the 17 euro-area countries to slip 0.4 percent and to flat line in the 28 countries of the European Union this year. In 2014, growth should hit 1.1 percent in the euro area and 1.4 percent in the EU. The poor growth is due to slowing demand from Asia and other emerging markets. Unemployment is likely to remain at high levels, according to Olli Rehn, the European Union’s commissioner for economics and monetary affairs. Unemployment will remain at 12.2 percent this year and throughout 2014, compared to a rate of 11.4 percent in 2012. Unemployment in Greece is expected to hit 27 percent this year.
Shale oil boosts US oil refineries
Crude oil prices in the Gulf of Mexico have been pushed to record discount levels against the Brent global benchmark, boosting profits for refiners in the Gulf of Mexico. According to the Financial Times, US oil production has surged in the past three years thanks to the shale formations in North Dakota. Infrastructure constraints have made it costly to move that oil to the refineries in the Gulf, therefore the US has not benefitted from the increased oil production. As the transport links continue to improve, however, US independent refiners such as Valero and Phillips 66 are benefiting from access to cheap oil. The benchmark US oil price, known as West Texas Intermediate, has fallen by 10 percent in the last month to a little above $94 per barrel. This is $10 per barrel lower than the global Brent Crude Oil benchmark.
Super Bowl in NYC will lead to swanky parties
With less than 100 days left until Super Bowl XLVIII, marketers are putting together their pre-game parties. The game will happen on February 2nd at the MetLife Stadium in East Rutherford, NJ. USA Today reports that Anheuser-Busch will be transforming a docked Norwegian Cruise Line ship into a massive Bud Light Hotel and entertainment venue. The Bud Light Hotel will encompass the Norwegian Getaway cruise ship and the Intrepid Sea, Air and Space Museum. There will be space for 4000 people and will have 22 bars and restaurants. Shape and Men’s Fitness magazines will co-host a Jan. 31 party with Mary J. Blige, John Legend and Marc Anthony. DirecTV will host two parties: a beach-themed bash on Feb. 1 and a sophisticated event in the evening. Many other parties are yet to be announced.
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.