Notes from Fed meeting cause markets to fall
The release of the notes from the most recent meeting of the Federal Reserve caused markets to fall yesterday, according to the Associated Press. The Fed cited concerns over the economic growth and the pace of hiring but indicated that further monetary stimulus was not necessary. This will be punctuated later this week by the ECB and their decision on interest rates. All of this is occurring as the Euro zone carefully worries about Spain and the implementation of its austerity measures. CNBC reports that Asian markets were mostly down on Wednesday and European markets are down. The Dow closed down 64 points on Tuesday ending at 13, 199.
US Airways pushing for merger with American
US Airways is informally telling the creditors of American Airlines that a combination of the two airlines would result in a $1.5 billion yield in revenues and savings. According to the Wall Street Journal, the combination of the No. 5 and No. 3 airlines in the amount of traffic would make the combined organizations closer to the size of competitors Delta and United. It would also help American to negotiate around some overwhelming union contracts. A merger, however, would make the entire process much longer because of the need for federal approval.
Allegiant Airlines to charge for use of overhead bins
Allegiant Airlines has announced that it will charge passengers $35 for use of overhead bins, according to USA Today. All carry ons must fit below the seat in front of the passenger. If the fee is paid online ahead of time it may be only $15. Spirit Airlines began charging for use of overhead bins in 2011 and has claimed it is successful.
US Auto makers have best monthly gain since 2007
March was the best month for US auto manufacturers since 2007, as reported by the Associated Press. Consumers were primarily seeking smaller cars to beat rising gasoline costs, but larger vehicles sold as well. edmunds.com indicates that 1.4 million cars and trucks were sold in March, up 13 percent from a year ago. If sales stay the same throughout the year it will total 14.4 million sales by year end up from 12.8 million sales in 2011. These sales numbers are still below the highs seen prior to the downturn. The average price of a car, according to True Car, is at a record of $30,748.
Climbing rents increasing home sales
According to the Wall Street Journal, climbing rents and lower home prices are beginning to move entry level buyers into the home purchasing market. Rents rose 2.7 percent last year and the national vacancy rate fell below 5 percent. With low mortgage rates combined with low home prices, purchasing is attractive but it is still difficult to obtain a mortgage due to high standards. Additionally a large number of homes are being purchased by investors. Sales to investors rose 65 percent in 2011 to 1.2 million, representing 27 percent of all 2011 sales.
Home Buyers Coming from Mainland China
The second largest foreign buyers of US homes are from mainland China and Hong Kong, as reported by USA Today. These buyers, who often pay in cash, are snapping up luxury homes in Los Angeles, New York and San Francisco. Many hope their children can be educated in the U.S. They are also looking at foreclosures in Florida and Las Vegas. Sales to Chinese nationals have increased 8 percent since 2010. According to China's Huran Report, there are currently 960,000 Millionaires in China and more than half want to move abroad.