Weak US earnings impact markets
The Financial Times is reporting that Asian shares and other markets are taking a pounding due to disappointing earnings from US companies and Japan’s trade data. Both GE and McDonald’s missed their third quarter estimates. At the same time, Japan, the world’s third largest economy, reported a wider than expected trade deficit in September, due to falling demand in Europe and China. Its exports dropped at the fastest rate since the earthquake and tsunami. The Dow closed down 205 points on Friday, ending at 13,343.
Facebook to add “gifting” capability
Those holding onto Facebook shares may want to rethink whether to sell. According to the Wall Street Journal, Facebook will be incorporating a service that allows its users to “gift” one another right on the site. Users can purchase items from retailers that have a Facebook page, enter credit card information for payment, and have the item delivered to another “friend” who accepts the gift and enters information as well. Of course, there are fees associated with all of these capabilities. Additionally, Facebook is working to build a full fledged ad network that will allow marketers to target ads on its site based upon their online browsing history. This could generate $2 billion in revenue. Experts believe Facebook still has huge potential so maybe that share price is just about right for investment.
British Petroleum to gain large stake in Russian energy firm
The state controlled Russian Energy firm, Rosneft, and British Petroleum, BP, are soon to announce a deal worth over $25 billion that would give BP a stake of 16 to 20 percent in Rosneft. Reuters reports that BP currently owns half of Russia’s third largest oil company, TNK-BP. The shares of TNK-BP will be rolled into Rosneft in exchange for shares and cash. BP’s current ventures in Russia are highly profitable and this deal allows it to have access into newer more developing oil fields.
Taxes will go up in January for 163 million workers
While neither Presidential campaign is discussing it, the reality is that in January the temporary reduction to payroll taxes will expire and no one is pushing to extend it. The Associated Press indicates that most politicians currently oppose the tax break which is about $1,000 per year for individuals and almost $4500 for two-earner families. Why? The tax break has not stimulated the sluggish economy and it continues to cut into the income stream that funds the almost broke Social Security system. AARP strongly opposes the continuation of the tax break.
US facing doctor shortage
The US is currently facing a shortage of doctors and the Association of American Medical Colleges predicts that by 2020 the shortage will amount to 90,000 doctors, including 45,000 patient care physicians. Why? Baby Boomers are getting older and will need more care, one third of existing doctors will retire this decade and Obamacare pays 30 to 40 percent less than private health companies. According to USA Today, the state with the highest doctor patient care ratio is Massachusetts with 314.8 patient care doctors for every 100,000 residents. In contrast, Mississippi has just 159.4 doctors per 100,000 patients. States with higher ratios are more affluent, more likely to have more individuals with private health insurance and often have medical schools that allow residents to practice as well.
UBS and Credit Suisse to cut jobs
UBS will cut 3,000 to 5,000 jobs as part of a cost saving measure to increase profits while Credit Suisse will announce 1,000 to 2,000 cuts, as reported by CNBC. UBS’ layoffs will be in technology and its investment bank while Credit Suisse’s layoffs are reported to be in information technology. The banks are being forced to make cuts to ensure they meet new capital requirements amid a sluggish economy.
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.