Chinese manufacturing contracts for another month
The preliminary HSBC China Manufacturing Purchasing Managers Index, a gauge of nationwide manufacturing activity, rose slightly to 47.8 in September compared to 47.6 in August. Any reading lower than 50, however, indicates an economy is contracting rather than growing, according to the Wall Street Journal. This is the eleventh straight month the index has been in negative territory. Experts believe the index will not become positive for the remainder of the year since global markets are moving deeper into recession. Markets in Asia reacted negatively to the reading. European markets are also down. The Dow gained 13 points on Wednesday, closing at 13577.96.
Euro Zone continues to slow despite bond buyback plan
CNBC reports that the downturn in manufacturing activity in Europe dropped this month at the fastest pace since July of 2009. The Euro zone PMI fell to 45.9 in September, down from 46.0 in August. As mentioned previously, a PMI reading below 50 indicates an economy is contracting rather than growing. Individual countries fared better with the German PMI showing unexpectedly strong improvement. France’s readings were markedly lower than expected. The overall unemployment rate in the Euro zone remains at 11.2 percent.
Bank of America to cut 16,000 jobs
Bank of America is planning to cut 16,000 jobs by year end as it speeds up a cost-cutting initiative due to declining revenues, according to the Wall Street Journal. The job cuts put the second largest US bank a year ahead of schedule under its Project New BAC. The bank has indicated it plans to eliminate $5 billion largely through cuts in consumer and technology areas. A second phase will eliminate $3 billion in annual expenses by 2015 by making cuts in capital markets, commercial banking and wealth management.
Audi asks Chinese Dealership to Remove Anti-Japan Banner
Audi’s ownership asked a Chinese car dealer to remove a banner advocating the murder of Japanese people after a photograph of the sign went viral on the internet, according to Bloomberg. The photo was posted as tensions between the two countries continue to escalate. Chinese sales represent 47 percent of Audi’s world wide profit. Anti-Japan sentiment in China has caused angry mobs to attack dealerships selling Japanese brands and damage the cars in the lots. Japan has shut down three factories based in China due to safety concerns. The protests center around a decades long dispute over a group of islands in the South China Sea. Japan is trying to buy the islands.
Oil prices fall below $108 per barrel due to Saudi pledge
Brent crude oil fell below $108 per barrel today after China’s PMI data was released and Saudi Arabia pledged to cool oil prices, according to Reuters. China’s Minister of Commerce indicated yesterday that demand for oil in China, now the number 2 oil consumer in the world, would be weak in the near future. Saudi Arabia pledged to cool prices which it indicated were not supported by market fundamentals. Stockpiles of crude oil jumped last week by a higher amount than anticipated in the US. Shouldn’t this mean gas prices are coming down?
Renters facing higher costs
USA Today reports that renters are facing an affordability challenge as their numbers continue to grow, shrinking the amount of units available. Census data indicates that 20 million rental households were “burdened” last year by spending more than 30 percent of their income on rent. That is the highest percentage in 7 years. Rents have increased 19.6 percent within that time period. The national vacancy rate for rentals is 7.4 percent, the lowest in 5 years.
Facebook’s Zuckerberg drops to 36 from 14 in Forbes’ ranking of the richest
The drop in Facebook stock has cost Mark Zuckerberg $8 billion in net worth, causing the world’s youngest billionaire to drop from 14 on the list of the world’s richest to number 36. His net worth still lingers at $9.4 billion. Bill Gates took the top spot on the list for the19th year, according to USAToday. Warren Buffett was in second place. Forbes said many of the rich got richer due to the rise in the stock market. New York City Mayor Michael Bloomberg is number 10 on the list. Four members of the top 10 are from the Walton family, founders of Walmart.
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.