The White House is under pressure to show tangible results in the enhancement of growth and increasing employment before the Congressional elections in November. The U.S. President Barack Obama next week will present new measures to boost U.S. economy today after it became clear that in August they were again created new jobs with a very slow pace, officials said. Obama has made a positive news that job creation is more than expected. He stressed however that the data are not good enough to tackle the economic problems the U.S. is necessary to take further measures. The White House is under pressure to show tangible results in the enhancement of growth and increasing employment before the election for Congress in November, when Democrats Obama may be “punished” because of voters reached nearly 10 percent unemployment. On Monday, Obama outlined several possible options for increasing measures including more tax reductions for the middle class, investing in green energy, more infrastructure costs and additional tax cuts for businesses to promote job creation.
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In their attempts to break the link between personal well-being and performance of their companies, insiders on Wall Street have taken significant sales this year. Sold by senior managers and consultants to companies shares are five times more than by such persons acquired securities data indicate the regulatory authorities in the U.S. Only heads of Goldman Sachs, JPMorgan, Citigroup and Wells Fargo had sold shares for about $ 100 million this year. Stand against such sales minimum purchases, data show. Since the beginning of the year, executives of Goldman sold the shares of the bank worth 64 million dollars, their colleagues from JPMorgan and Citigroup have been much more modest sales were respectively 16 and $ 5 million. For sales and they have their reasons are related to market conditions, considered by InsiderScore. One of them is the normalization of the situation after sharp fluctuations in stock prices over the past two years, and another - the large proportion of shares in the bonuses given to bosses on Wall Street. Last year about 70% of companies have granted options to purchase shares of the capital, instead of bonuses in the form of cash.
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The U.S. stock indexes took down at the beginning of today’s session after being in negative territory for most part of last week. U.S. economic data today showed that U.S. consumer spending rose faster than their incomes in July. The index of 30 leading companies in the U.S. stock Dow Jones IA decreased by 0.3% to 10 124.76 points and a half hours after the start of the session. The broader S & P 500 lost 0.3 percent to 1 061.22 points, led by financial companies. The main stock index, Nasdaq - Nasdaq Composite, decreased by 0.30% to 2 146.18 points. Economic data are a major driver of the indexes in recent weeks and will be a key focus for investors over the next few days, when they go out key data on the labor market and housing prices in the U.S. The session ended on Friday with quotes increases after the Federal Reserve is committed to continuing to assist the recovery of the economy with its liberal monetary policy. Shortly before Friday’s session revealed that the U.S. economy grew by 1.6 percent in the second quarter, significantly below the originally announced growth of 2.4 per cent.
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The Obama’s administration plans to tighten trade laws in the country to oppose exporting cheap goods such as China and Vietnam. The trade ministry has developed 14 proposals to address illegal practices of these countries to subsidize exports. The introduction of planned changes, which are specifically aimed at countries where governments have control over markets, will begin later this year. The plan is part of White House efforts to double exports to the U.S. over the next five years to encourage job creation - a goal that President Barack Obama outlined in his speech in January. From the administration point out that the doubling of exports will help create 2 million jobs. The changes will stop the practice of allowing individual foreign companies to apply for exemption from additional taxes, if they prove that they have not done dumping or receiving subsidies for a certain period. Moreover, changes designed to improve the efficiency of the administration of international trade, which examine whether foreign companies importing products in the U.S. receive unfair subsidies in their home countries.
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USA must overcome its colossal budget deficit if they want to preserve their evaluation of government debt AAA. It warned the head of department for evaluation of public debt in the international rating agency Standard & Poor’s John Chambers, as quoted by AFP. Chambers noted that it is very important for the rating of the U.S. Congress to consider with great care and take action on the proposals of the Financial liability established by President Barack Obama for increasing the budget deficit. Its conclusions will be presented in December. The response to these proposals, Congress will determine how the S & P will assess the quality of the debt of the world’s biggest economy, warned Chambers. This warning of rating agencies followed the threat of another of the leading companies in the sector - Moody’s, the U.S. along with France, Germany and Britain, are currently evaluating “AAA” could lose its rating, or at least close to a decrease because of their budgetary difficulties. Obama’s government said it wants to halve the budget deficit in 2013 and to stabilize debt at 70 per cent of gross domestic product (GDP) by 2015.
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Need more arguments that Washington should no longer plans to promote the economy? Surely you do - the list is already long enough, but worth it to see the basic argument and Andy Siun, former chief economist for Morgan Stanley’s Asia region. He says that cost the U.S. simply support the economy of China and harming its own economy. “Money will expire just like water - incentives help most economies with lower costs, regardless of where they are intended,” said Siun cited by Gordon Chang in material Forbes. The argumentation of Siun is pretty simple, says Chang. He points out that manufacturers will move funds received as an incentive to developing countries, simply because there production costs are lower. Whether for General Electric, or Siemens. companies will be kept of where the money will spend most effectively. So Siun states, the West poured money into the global economy, they will find their way to developing countries, where either way liquidity is quite high. Thus, inflation will return through price rises of raw materials. Employed in developing economies do will inevitably require higher salaries. Then Fe will have to raise interest rates to deal with excess liquidity, a policy tightening likely will pull the trigger to pop the bubble of the assets, “explains Chang.
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The U.S. trading session on Tuesday ended with decreases in indexes that were less throughout the trading marked by disappointing data on personal consumer expenditure, and housing market activity in the manufacturing sector. Before the start of the session showed that personal income and spending of the U.S. consumers remained unchanged in June at an expected increase of 0.1 percent on a monthly basis for both counts. High unemployment and uncertain prospects for the U.S. economy have increased the share of household savings and Work from Home Moms from their income to its highest level last year. Shortly thereafter, Business Finance data on planned sales of homes showed an unexpected drop of 2.6 percent compared to May when they shrugged dramatically by 29.9 percent on a monthly basis. The report of the National Association of Realtors Real Estate (NAR) in the U.S. market surprised analysts who had expected growth of 0.5 percent on a monthly basis. Were disappointing data on new factory orders in June, which decreased significantly more than expected by 1.2 percent on a monthly basis, once in May shrugged with 1.8 per cent.
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The Federal Reserve will consider an important change regarding the management of its huge portfolio of securities, the upcoming meeting on August 10, transmits Reuters, citing sources of the Wall Street Journal. The U.S. central bank will consider whether to use the proceeds from maturing bonds it holds to purchase new ones or government securities portfolio, instead leaving it to gradually shrink, as expected. Such a change only four months after the Fed discontinued its broader program for the purchase of bonds will broadcast a signal of growing concern about the outlook for the U.S. economy. If the institution’s economic outlook has deteriorated significantly, this step can be a harbinger of more serious efforts in infusing liquidity into the system. The purchase of additional assets was one of the options that Federal Reserve Chairman Ben Bernanke outlined at the hearing in Congress on July 21, when asked what other measures may take the central bank to support economic growth, if necessary.
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After the good performance of the state indexes in July, the first week of August stock may be difficult for Wall Street because of the looming data on the labor market and the state of factory production and services sectors in the U.S. The data deteriorated state of the global economy of recent days will probably bring further hesitation among investors about the economic recovery. At the end of last week it became clear that the U.S. economy has reduced its growth rate to 2.4 percent in the second quarter. Earlier in July, data on Chinese and South Korean economies also showed slower growth, and today it became clear that Chinese industry has contracted in July for the first time since April last year so far. Good financial performance of U.S. stock companies for the second quarter, however, helped the three major indexes on Wall Street to mark its best monthly performance for the last year in July. However, this happened against a background of low traded volume, which somewhat distorts the market movements. The most important U.S. data this week come out on Friday when it will become clear what is the change in employment and unemployment in the country in July. It is the labor market is one of the most important signs of sustainable recovery of U.S. economy.
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The record U.S. budget deficits have caused fierce criticism of the government of this country create one of the greatest risks to the development of its economy in the long term. Despite threatening size of government debt, however, interest in U.S. government securities (GS) fell, and in a time of economic expansion, which never happened in the last 50 years. Another proof of this was a two-year government bonds auction on July 23 in which the yield fell to their lowest historical values of 0.5516 percent. Meanwhile, yields on 10-year bond dropped to 2.85 percent last week, which is its lowest level in 15 months, after speaking of the Federal Reserve chairman Ben Bernanke, who raised concerns about the fragile state of U.S. economy. This prompted investors to sell riskier assets, such shares shall be construed and take refuge in U.S. bonds. As a result, their demand was noted record levels this year. Submitted bids for participation in auctions of government securities exceeded on average 2.9 times the value of bonds offered for sale, which is 18 percent more annually.
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