Tag Archives: October December

ADB trims Asia growth forecasts on China slowdown

China’s slowing economic growth is weakening momentum throughout the rest of Asia, the Asian Development Bank said on Tuesday as it revised down its forecasts for the region.

A day after Beijing released data showing its economy slowed for a second successive month in April-June, the Manila-based ADB trimmed its outlook for developing Asia this year to 6.3 percent, from 6.6 percent.

In the update to its annual Asian Development Outlook publication, first published in April, the bank also pared its 2014 forecast for developing Asia to 6.4 percent, from 6.7 percent.

The update is only a little better that what the bank described in the report as the region’s “relatively sluggish” growth pace of 6.1 percent last year.

“The drop in trade and scaling back of investment are part of a more balanced growth path for (China), and the knock-on effect of its slower pace is definitely a concern for the region,” the bank’s chief economist, Changyong Rhee, said in a statement.

“But we are also seeing more subdued activity across much of developing Asia,” Rhee added.

Developing Asia groups 45 nations or territories from Central Asia through to the Pacific islands, but excludes Japan.

The report cited a marginally better outlook for the advanced economies, particularly Japan.

However, this did not lead to stronger demand for Asian exports, and the first-half economic performance across the region was “unexpectedly subdued”, it added.

China said Monday gross domestic product expanded 7.5 percent in the second quarter, following 7.7 percent in the previous three months and 7.9 percent in October-December.

The ADB said it now sees China’s economy growing 7.7 percent this year and 7.5 percent in 2014.

Both figures are lower than its April forecasts of 8.2 percent and 8.0 percent. The Asian economic giant grew 7.8 percent last year.

The ADB now expects Southeast Asia’s economies to expand 5.2 percent this year, down from 5.4 percent.

It also trimmed its forecast for South Asia to 5.6 percent this year, while maintaining its 6.2 percent projection for 2014.

On a positive note, the ADB said slower GDP growth was helping the region contain inflation., while expanded global natural gas production was also helping suppress energy prices.

The bank lowered its inflation forecasts for developing Asia to 3.5 percent this year and 3.7 percent in 2014, the latter on par with the 2012 rate.

…read more

Source: FULL ARTICLE at Fox World News

Wholesalers Cut Stockpiles to Lowest Level in 17 Months

By The Associated Press

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Wilfredo Lee/APShipping containers are shown stacked at the Port of Miami in January. Data released Tuesday show U.S. wholesalers cut restocking in February to levels not seen in 17 months.

By CHRISTOPHER S. RUGABER

WASHINGTON — U.S. wholesalers cut their restocking in February by the most in 17 months. But their sales jumped, suggesting companies underestimated consumer demand.

The Commerce Department said Tuesday that stockpiles at the wholesale level declined 0.3 percent in February. That followed a 0.8 percent increase in January, which was revised lower.

The decline was the first in eight months and the biggest since September 2011. Farm products and gasoline led the drop. Agriculture stockpiles have fallen in recent months because of a drought in the Midwest.

Sales at the wholesale level rose 1.7 percent, the most since November. The increase was led by large gains in gasoline, clothes and computers.

Shrinking stockpiles weigh on economic growth because it means factories are producing fewer goods. But a jump in consumer spending in February suggests companies will have to build their stockpiles faster in the coming months, which should spur more growth.

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Sluggish growth in stockpiles was a key reason the economy barely grew in the October-December quarter. But economists are looking for a significant rebound in business restocking this year, helped by a resilient consumer that has continued to spend despite paying higher taxes.

Most economists expect growth accelerated in the January-March quarter to an annual rate of more than 3 percent. That would be a vast improvement over the 0.4 percent growth in the final three months of 2012.

In January, Social Security taxes rose on nearly all Americans who draw a paycheck. The increase leaves a person earning $50,000 with about $1,000 less to spend in 2013. A household with two high-paid workers will have up to $4,500 less.

But Americans spent more in January and February. Many analysts now expect consumer spending rose by about 3 percent at an annual rate in the first quarter. That would be much faster than the fourth quarter’s 1.8 percent pace.

The jump in spending will likely force many companies to order more goods to restock their shelves.

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Source: FULL ARTICLE at DailyFinance

U.S. Trade Gap Narrows in February on Stronger Oil, Auto Exports

By The Associated Press

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Patrick Semansky/AP

By MARTIN CRUTSINGER

WASHINGTON — The U.S. trade deficit unexpectedly narrowed in February as exports climbed close to an all-time high and the volume of imported crude oil fell to the lowest level in 17 years.

The gap between exports and imports shrank to $43 billion in February, down 3.4 percent from January’s revised $44.5 billion, the Commerce Department said Friday. It was the smallest trade imbalance since December when the gap had declined to $38.1 billion, the lowest point in nearly three years.

Exports rose 0.8 percent to $186 billion, close to the record high set in December. Stronger exports of U.S. energy products and autos offset declines in sales of airplanes and farm equipment. Imports were flat at $228.9 billion with the volume of crude oil falling to the lowest point since March 1996.

The politically sensitive deficit with China shrank to $23.4 billion, the lowest point in 11 months. Exports to the European Union were down 0.9 percent in February, compared to January, reflecting continued economic weakness as that region struggles with a recession triggered by a debt crisis.

Through the first two months of this year, the U.S. deficit is running at an annual rate of $524.5 billion, down slightly from last year’s $539.5 billion imbalance.

Economists expect the deficit this year will narrow slightly, in part because of continued gains in U.S. energy exports. A narrower trade gap boosts growth because it means U.S. companies are earning more from overseas sales while U.S. consumers and businesses are spending less on foreign products.

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But Paul Dales, senior U.S. economist at Capital Economics, said that he was worried that expectations for exports to keep rising faster than imports may fall short given uncertain global conditions.

“We are concerned that subdued global demand will hold back export growth. And the rest of the data released this week makes us more concerned that the domestic economy is a bit weaker than we thought,” he said.

In a separate report Friday, the government said that the U.S. economy created just 88,000 jobs in March, the fewest in nine months.

The economy as measured by the gross domestic product grew at an annual rate of 0.4 percent in the October-December quarter. Economists believe economic growth strengthened in the January-March quarter to around 3 percent.

In addition to increases in U.S. energy exports, economists are also hopeful that exports of other products will rise this year as well, helped by stronger growth in some major export markets.

Taking a Harder Line on China

That forecast is based on an assumption that the European debt crisis will stabilize, helping boost exports to that region and that growth in Asia will rebound further. The outlook for Europe has been clouded in …read more

Source: FULL ARTICLE at DailyFinance

US economy expands at 0.4 percent rate

The U.S. economy grew at a slightly faster but still anemic rate at the end of last year. However, there is hope that growth accelerated in early 2013 despite higher taxes and cuts in government spending.

The Commerce Department says the economy grew at an annual rate of 0.4 percent in the October-December quarter. That was slightly better than the previous estimate of 0.1 percent growth. The revision reflected stronger business investment and export sales.

Analysts think the economy is growing at a rate of around 2.5 percent in the current January-March quarter, which ends this week.

Steady hiring has kept consumers spending this year. And a rebound in company stockpiling, further gains in housing and more business spending also likely drove faster growth in the first quarter.

…read more
Source: FULL ARTICLE at Fox US News

Federal Reserve Maintains Stance on Record-Low Interest Rates

By The Associated Press

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Richard Drew/AP Federal Reserve Chairman Ben Bernanke as seen on a monitor on the floor of the New York Stock Exchange. The Fed said Wednesday it plans to keep interest rates at record lows for the foreseeable future.

By MARTIN CRUTSINGER

The Federal Reserve said Wednesday that the U.S. economy has strengthened after pausing late last year but still needs the Fed’s extraordinary support to help lower high unemployment.

In a statement after a two-day meeting, the Fed stood by its plan to keep short-term interest rates at record lows at least until unemployment falls to 6.5 percent, as long as the inflation outlook remains mild. And it says it will continue buying $85 billion a month in bonds indefinitely to keep long-term borrowing costs down.

The unemployment rate fell to a four-year low of 7.7 percent in February, among many signs of a healthier economy.

The Fed notes in its statement that the job market has improved, consumer spending and business investment have increased and the housing market has strengthened.

Still, its latest economic forecast, also released Wednesday, maintains that unemployment won’t reach 6.5 percent until 2015.

The Fed also cautioned that government spending cuts and tax increases could slow the economy. It projects growth won’t exceed 2.8 percent this year, slightly lower than its December forecast of 3 percent.

A total of 13 Fed officials still believe the first rate hike will not occur until 2015, the same number as in December. One Fed official projects the first boost in the short-term lending rate will not occur until 2016.

The statement was approved on an 11-1 vote. Esther George, president of the Kansas City regional Fed bank, dissented for a second straight meeting. She reiterated her concerns that the Fed’s aggressive stimulus could heighten the risk of inflation and financial instability.

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The economy slowed to an annual growth rate of just 0.1 percent in the October-December quarter, a near-stall that was due mainly to temporary factors that have largely faded. Economists think growth has rebounded in the January-March quarter to an annual rate around 2 percent or more. The most recent data support that view.

Americans spent more at retailers in February despite higher Social Security taxes that shrank most workers’ paychecks. Manufacturing gained solidly in February. And employers have gone on a four-month hiring spree, adding an average of 205,000 jobs a month. In February, the unemployment rate, though still high, reached its lowest point since December 2008.

One reason for the Fed’s reluctance to reduce its stimulus is the history of the past three years. In each of the three, economic prospects looked promising as the year began. Yet in each case, the economy stumbled.

In 2010, U.S. growth was hurt by turmoil from Europe‘s debt crisis. In 2011, a spike in gas …read more
Source: FULL ARTICLE at DailyFinance

Fed Seen Maintaining Stance on Record Low Interest Rates

By The Associated Press

federal reserve bernanke interest rates

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Richard Drew/AP Federal Reserve Chairman Ben Bernanke is seen on a monitor on the floor of the New York Stock Exchange on Tuesday, the same day Bernanke told Congress maintaining low interest is necessary in an economy is still burdened by high unemployment.

By MARTIN CRUTSINGER

WASHINGTON — The Federal Reserve on Wednesday is expected to maintain its resolve to keep borrowing costs at record lows despite growing signs that the economy is strengthening.

The Fed will end a two-day meeting with a policy statement and updated economic forecasts. Afterward, Chairman Ben Bernanke will hold a news conference. Most analysts think policymakers will acknowledge the economy’s improvements but leave the Fed’s stimulative policies unchanged.

Bernanke has said in recent weeks that the job market, in particular, has a long way to go to full health and still needs the Fed’s extraordinary support.

The unemployment rate, at 7.7 percent, remains well above the 5 percent to 6 percent range associated with a healthy economy. The Fed has said it plans to keep short-term rates at record lows at least until unemployment falls to 6.5 percent, as long as the inflation outlook remains mild. And it foresees unemployment staying above 6.5 percent until at least the end of 2015.

Economists think Bernanke will take note of the economy’s gains. But most foresee no pullback in the Fed’s strategy of keeping short-term rates at record lows and of buying $85 billion a month in Treasurys and mortgage bonds to keep long-term loan rates down.

“Even though the economy has improved, it has not improved enough to switch course,” says Diane Swonk, chief economist Mesirow Financial. “We don’t have unemployment low enough yet.”

The economy slowed to an annual growth rate of just 0.1 percent in the October-December quarter, a near-stall that was due mainly to temporary factors that have largely faded. Economists think growth has rebounded in the January-March quarter to an annual rate around 2 percent or more. The most recent data support that view.

Americans spent more at retailers in February despite higher Social Security taxes that shrank most workers’ paychecks. Manufacturing gained solidly in February. And employers have gone on a four-month hiring spree, adding an average of 205,000 jobs a month. In February, the unemployment rate, though still high, reached its lowest point in more than four years.

The brighter news has prompted speculation that the Fed might be preparing to dial back its easy-money policies. Such thinking has been fed by concerns voiced by a few Fed regional bank presidents about the low-rate policies.

Inflation Fears

These include fears that the Fed has pumped so much money into the economy that it could eventually ignite inflation, fuel speculative asset bubbles or destabilize markets once the Fed has to start raising rates or …read more
Source: FULL ARTICLE at DailyFinance

Should You Buy TUI Travel?

By Royston Wild, The Motley Fool

Filed under:

LONDON — In my opinion, travel operator TUI Travel  — whose established brands include Thomson and First Choice — provides great investment potential through robust earnings growth and rising shareholder payouts.

February’s first-quarter update revealed the company had made a promising start to the current financial year. And I expect the firm’s exclusive package portfolio to continue delivering growth in future years.

The sun always shines on TT
Last month, TUI Travel said its summer 2013 bookings in the U.K. and Nordic regions were up 9% and 10% respectively on the previous year, with average holiday prices and margins in key markets higher than in 2011. The operator also noted it had already sold almost a third of its mainstream summer holiday packages.

The company continues to grab market share in Britain and boosted its share of exclusive holiday bookings by 15% in the October-December period. Around nine-tenths of domestic sales now come from direct distribution.

As well, TUI Travel is making inroads with its online sales platform. Within the U.K., online transactions accounted for 38% of all booked summer holidays, up a percentage point on the year, while in the Nordic states the proportion rose two percentage points to 66%. Rising Internet sales bode well for future growth.

Solid dividends at decent prices
Analysts expect TUI Travel to maintain earnings-per-share growth in the medium term — a 7% rise to 28p for the year ending September 2013 is predicted, with a 9% advance next year to 30 pence.

In addition, the firm offers a dividend yield in excess of the 3.5% average for the FTSE 100. According to broker estimates, yields of 4.1% and 4.5% are due for 2013 and 2014 respectively.

TUI Travel has continued to raise its annual dividend, even when earnings have come under pressure in recent years. A payout of 11.7 pence per share for 2012 is projected to rise to 12.6 pence and 13.6 pence per share for this year and next. And these payments are well protected, with anticipated coverage of 2.2 times.

The shares of the travel specialist currently change hands on P/E ratios of 11.5 and 10.6 for 2013 and 2014 respectively, which compares favorably to an average forward earnings multiple of 14.8 for the wider travel and leisure sector.

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The article Should You Buy TUI Travel? originally appeared on Fool.com.

Royston does not own shares in TUI Travel.
 The Motley Fool …read more
Source: FULL ARTICLE at DailyFinance

US current account trade deficit narrows

The U.S. current account trade deficit narrowed in the final three months of 2012. But that didn’t prevent the deficit for the entire year from climbing to the highest level in four years.

The Commerce Department says the current account deficit in the October-December quarter narrowed to $110.4 billion, down 1.8 percent from the previous quarter. The improvement reflected gains in Americans’ earnings on their foreign investments and stronger earnings on service trade, a category that covers such things as airline travel.

For the year, the current account deficit widened to $475 billion, a 1.9 percent increase from 2011. It was the largest annual imbalance since 2008.

The current account is the broadest gauge of trade. It tracks not only the sale of goods and services but also investment flows.

…read more
Source: FULL ARTICLE at Fox US News

Greek unemployment reaches record 26 percent

Unemployment in debt-crippled Greece rose to a record of 26 percent in the last quarter of 2012, as austerity measures combined with a deep recession took a harsh toll on the workforce.

The figures were worse than the previous quarter’s 24.8 percent, and 20.7 percent a year earlier.

The national statistical authority said Thursday that 1.29 million people were out of a job in October-December 2012. In the under 25 age group, unemployment was 57.8 percent.

The rate for women was 29.7 percent, compared with 23.3 percent for men.

Greece‘s economy has been falling apart over the past three years, savaged by its financial crisis. The country is surviving on international rescue loans, released on condition it keeps up a tough program of spending cuts and tax hikes.

…read more
Source: FULL ARTICLE at Fox World News

Should I Buy ARM Holdings for My ISA?

By Royston Wild, The Motley Fool

Filed under:

LONDON — I am backing ARM Holdings  to remain on course for excellent earnings growth. Exploding demand for smartphones and tablets, particularly in the fruitful emerging markets of Asia, should continue to drive demand for ARM‘s tech savvy.

However, I reckon the current share price suggests the group’s future growth prospects are currently priced in, while an unattractive dividend policy also undermines the investment appeal presently.

But bear with me, as I believe there are other fantastic opportunities with which to bolster your tax-efficient stocks and share ISA, one of which I’ll mention in a minute (just click here for more information on how to maximize your returns from ISAs).

A strong sales processor
ARM — which designs and licenses intellectual property in the semiconductor market — saw revenue increase 21% in the fourth quarter to $263 million, bucking the enduring weakness seen in the wider semiconductor industry.

This excellent performance was prompted by greater royalty rates and gaining market share, particularly with digital TVs and microcontrollers. Furthermore, the company’s promising, higher-value Cortex-A processor range, which are used in smartphones and tablets, also printed increased royalty percentages during the quarter.

Last month’s results also showed ARM‘s order backlog in the October-December period rose 25% from the third quarter. This advance provides assurance that ARM should continue to ride out the current troubles affecting many of its peers.

The price is right?
City analysts expect earnings per share to continue rocketing higher in coming years, with growth of 28% to 19 pence predicted for 2013, and a 26% increase to 24 pence anticipated next year.

But ARM currently trades on gargantuan P/E readings of 49.4 and 39.3 for this year and next, far in excess of the forward multiple of 26.5 projected for the broader technology hardware and equipment sector.

And the firm’s premium rating is underlined by price/earnings to growth (PEG) estimates of 1.8 and 1.5 for the next two years (a figure under 1 is generally considered decent value for money). ARM‘s share price has leapt more than 1,000% during the past five years, and current levels suggest the optimistic growth prospects are currently priced in.

Diddy dividends
ARM‘s commitment to stellar growth is reflected in a miserly dividend yield, projected at 0.6% and 0.7% for 2013 and 2014, respectively, and well below the 3.5% FTSE 100 average.

The tech company continues to build its yearly dividend, and projected payouts of 5.3 pence and 6.5 pence per share for this year and next are up from 4.5 pence per share for 2012. However, such amounts still lag the payments from most of the UK‘s other large caps by quite a distance.

Electrify your ISA income with the Fool
So in my opinion, the combination of a small dividend combined with an ultra-high P/E rating undermines ARM‘s case as a profitable ISA pick, at least for the time being.

But if you are looking for other lucrative payout plays to turbocharge the income from your stock and shares ISA, I recommend …read more
Source: FULL ARTICLE at DailyFinance

Greek economy shrinks 5.7 percent in 4th quarter

Updated official data show Greece‘s economy shrank at a slightly slower pace than initially forecast in the last quarter of 2012, but still contracted by 6.4 percent during the year.

The country, which is dependent on bailout loans to survive, is in its sixth year of recession, which has been exacerbated by harsh austerity measures demanded by creditors to curb runaway budget deficits.

The country’s statistical authority, Elstat, said Monday that Greece‘s economy shrank 5.7 percent in October-December 2012, compared to a year earlier — slightly better than earlier estimates of 6 percent.

Greece‘s economy has contracted by more than a fifth since 2008, and is expected to have shrunk by 25 percent before the country is expected to start recovering during the latter part of this year.

…read more
Source: FULL ARTICLE at Fox World News

US productivity fell at 2 percent rate

U.S. worker productivity shrank in the final three months of 2012 although the decline was caused by temporary factors.

The Labor Department says productivity contracted at an annual rate of 2 percent in the October-December quarter, the biggest drop since the first quarter of 2011. Productivity had risen at 3.2 percent rate in the July-September quarter.

Labor costs rose at a 4.5 percent rate in the fourth quarter, the fastest gain since the first quarter of 2012.

Productivity is the amount of output per hour of work. It shrank in the fourth quarter because economic activity contracted while hours worked rose. The economy declined at an annual rate of 0.1 percent, a drop caused mainly by deep defense cuts and slower restocking, changes not expected to last.

…read more
Source: FULL ARTICLE at Fox US News

Sanofi earns slump in 4th quarter

French drug maker Sanofi says its net profit was more than halved in the fourth quarter from a year earlier as mounting restructuring costs and patent losses on key drugs combined to hammer earnings.

Sanofi said Thursday that its net profit was €438 million ($593 million) in the October-December quarter, down from €1.5 billion a year earlier. Sales were flat at €8.5 billion in the quarter. Restructuring costs rose over €100 million to €834 million.

The company blamed the loss of U.S. patent protection on key drugs Plavix and Avapro cost it €1.3 billion last year.

Sanofi warned its core earnings per share could fall up to 5 percent this year, after a 12.8 percent drop in 2012.

…read more
Source: FULL ARTICLE at Fox World News

Facebook Beats Expectations, but Stock Falls

Facebook’s fourth-quarter financial results surpassed Wall Street‘s expectations, but the company’s stock is dipping lower in extended trading. Facebook earned $64 million, or 3 cents per share, in the October-December period. That’s down from $360 million, or 14 cents per share, a year earlier when it was still a privately…
Source: FULL ARTICLE at Newser – Home

Apple shares plunge as growth appears to stall

Apple shares are plunging after the company reported quarterly results that point to growth slowing after five blowout years.

The stock was down $50.68, or 9.9 percent, at $463.32 in late morning trading.

Even with the stock‘s decline, Apple Inc. is the world’s most valuable company, a position it’s held for more than a year. But it’s now worth just 4 percent more than No. 2 Exxon Mobil Corp.

Late Wednesday, Apple reported October-December earnings that were flat compared with the year before. It predicted sales growth for the current quarter of around 7 percent — far from the 50-percent-plus rate it’s often hit in recent years. Analysts believe Apple is unable to fully capitalize on the global smartphone boom with just one new — and very expensive — phone model every year.

Source: FULL ARTICLE at Fox US News