US Manufacturing slumps
A survey by the Institute for Supply Management released on Tuesday indicated that US manufacturing has slumped due to scaled back demand for machinery, equipment and other investments. The index fell to 49.6 from 49.8 in July. The index has been below the 50 level for three months in a row. A rating below 50 indicates an economy is contracting rather than expanding. The Associated Press reports that manufacturing activity fell in the 17 euro zone countries as well as Britain, China, Japan and Brazil. China’s factory activity fell to a three year low. The Dow fell 54 points on Tuesday to close at 13,035. European and Asian markets are both down on Wednesday.
US Slips in Ranking of Global Competitiveness
The World Economic Forum, WEF, released a survey today that placed the US as number 7 in a ranking of competitive economies. Last year the US was ranked as number 5, according to CNBC. A lack of macroeconomic stability, the business community’s mistrust of government and concerns over fiscal health were blamed for the US’ fourth year of decline in a row. The survey ranks the competitiveness of 144 countries based on 12 indicators including infrastructure, macroeconomic environment, labor market efficiency and innovation. Switzerland achieved the top spot this year. China is ranked at 26.
Greeks Need to work a 6 day week according to creditors
CNBC reports that in a leaked letter from international creditors to the Greek government, it was urged that flexibility must be added to Greek work schedules and that the maximum number of work days should be increased to six. Other comments from the European Central Bank, European Commission and European Central Bank called for increasing the number of hours worked and decreasing break times. Greece continues to struggle to implement existing agreed upon austerity measures in order to meet the demands of its creditors. Other euro zone countries are becoming exasperated with Greece and are beginning to believe a “Grexit”, Greece exiting the euro zone, is the best alternative.
BP accused of gross negligence in Gulf oil spill
The Department of Justice intends to prove that BP acted with gross negligence in the Deepwater Horizon disaster that occurred in 2010, according to the Financial Times. If the DOJ can prove gross negligence, BP will be subject to penalties of $21 billion under the Clean Water Act. Compensatory and punitive damages could be charged on top of that amount. The trial is set for January. BP is currently trying to settle with Gulf fishermen for $7.8 billion.
US auto sales at three year high
Big pickups helped US auto sales reach a three year high, according to the Associated Press. Demand for full size pickups jumped 16 percent in August, making it the strongest sales month since August 2009. Overall auto sales increased 20 percent from a year ago to 1.3 million. The total US auto sales in August rose to 14.5 million, the best monthly sales pace since 2009’s “cash for clunkers” program. Experts indicate pent up demand is fueling sales since the average US auto is 11 years old.
Facebook reassures employees
In a regulatory filing on Tuesday, Facebook said CEO Mark Zuckerberg and two other directors will not sell personal stock for a year, except to cover tax liabilities. According to the Wall Street Journal, Facebook will buy back 101 million shares when it issues previously restricted stock to its staff in October. This will reduce the amount of shares available to the market and spread out the amount of shares that could flood the market in November after a lockup period expires. After falling below $18 per share on Tuesday, Facebook shares ticked up after hours to $18.03, still well below the offering price of more than $30.
Rolls Royce sees Second Year of Record Sales due to Asian Demand
Asia accounts for 40 percent of Rolls Royce sales, and that number is expected to rise, according to Bloomberg. Last year the company manufactured 3,538 vehicles, a record high for the 107 year old company. Its Ghost sedan sells for $246,500 and is the largest seller. The company sold out of its $1.2 million Year of the Dragon model. The US accounts for 30 percent of Rolls Royce sales and Europe and the Middle East represent 15 percent each.
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.