Experts predict worst US quarterly earnings since 2009
The slowdown in the global economy and the weak US recovery is expected to result in one of the worst US quarterly earnings seasons since 2009, according to the Financial Times. Energy and materials companies are anticipated to have the worst downturns. Wall Street analysts project a 2.7 percent downturn of the S&P. FedEx and UPS, often seen as barometers for world economic health, have both cut their earnings. The earnings season kicks off on Tuesday with Alcoa, followed by JP Morgan and Wells on Friday. Experts indicate that stock prices have been supported this year by the Federal Reserve actions. If the markets do not correct after earnings season, investors may feel more positive in the future. The Dow was up 34 points on Friday ending at 13,610. US markets are closed today but Dow futures are down. Both Asian and European markets are also negative.
World Bank cuts China growth forecast
The Financial Times is reporting that the World Bank has cut its forecast for growth in China’s economy to 7.7 percent, a steep downgrade from the 8.2 percent forecast in May. China’s GDP grew 9.3 percent in 2011 but weak exports and lower growth slackened the pace to 7.6 percent in the second quarter of 2012. China’s economy is predicted to remain weak and perhaps slow down even more although experts belive they will not suffer a “hard landing”.
SEC turns to rapid traders for training
The SEC has acknowledged that it has fallen behind the traders that it regulates and is turning to one of the high frequency trading firms for training. A CNBC report indicates that Tradeworx, a 45 person firm based in New Jersey, has dispatched experts to Washington, DC to tutor regulators on a sophisticated computer program that will give the SEC its first real time window into the stock market. Experts say that having the SEC learn to use the Tradeworx program will cost $2.5 million but is the easiest way to allow the regulators to catch up and to have the ability to monitor trades. The fear is that the government is relying upon the very subjects that they need to monitor to build the devices that they need. The software will give regulators the ability to spot patterns in trading and in an individual stock or to rewind and watch what happened in a previous crisis.
California gasoline prices hit all-time high
Gasoline prices in California hit an all time high on Sunday, a day after reaching a four year high, according to AAA. USA Today reports that the state wide average gasoline price is $4.65, the highest in the nation. The price hike is blamed on a temporary shortage. Nationwide the average gas price is $3.81 per gallon, the highest ever for this time of the year. The surge in California is blamed on a power outage at a Southern California refinery. Prices are expected to stabilize next week. California laws require refineries to supply a special blend of cleaner burning gasoline from April to October.
Social media threatens greeting card industry
As more individuals post “happy birthday” on Facebook walls and “Like” one another’s posts, fewer individuals are congratulating others the old fashioned way via greeting cards. The Associated Press states that Hallmark, the nation’s top card maker, will close a Kansas plant that made one third of its greeting cards and consolidate operations in Kansas City. In the past ten years the number of greeting cards has dropped from 6 billion to 5 billion annually, according to Hallmark. The Greeting Card Association puts the figure at 7 billion. Hallmark is moving forward and now has an app that allows individuals to customize and send cards from their phones.
Portugal’s path to recovery
Portugal, the best performing of all 17 euro-zone bond markets so far in 2012, persuaded investors to hand over $4.6 billion of one-year debt in exchange for three year bonds. The Wall Street Journal indicates that this bond swap will be the first step towards regaining access to international bond markets for Portugal. Portugal has stuck to its austerity program despite protests and is beginning to see a light at the end of the tunnel. On Wednesday it unveiled additional tax increases to keep its bailout program on track.
Spanish protest in 56 cities
Tens of thousands of people marched in 56 Spanish cities on Sunday to protest austerity cuts that they believe will increase the unemployment rate. According to the Associated Press, trade union leaders have warned the government that a strike could occur as early as November 14th.
Vermont objects to syrup grading
While some states use the USDA standards to grade their syrup, Vermont has consistently had its own syrup grading standards. The Associated Press says that this is because Vermont believes its syrup is so superior to other syrups that its products should be graded on a separate scale. As an industry, syrup making in Vermont nets about $130 million per year. But syrup makers nationwide and in Canada are pressuring Vermont as they work to create an international grading standard. The USDA plans to adopt the standards in 2013. Vermont will be holding public hearings on whether or not to adopt the standards within the next few months.
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.