US Stock Markets Bouncing Back
July 31, 2007
Stock markets in the US have today showed strong performance thus far, signifying an apparent recovery from the losses throughout the course of last week.
The strong performance over trading this morning and yesterday has been echoed around the world, with most of the world’s major stock exchanges posting positive trading results.
US stocks closed up on yesterday, after recovering from the results of last week. After plummeting as a result of the stagnant housing market and perceived poor economic performance, the figures last week reflected the worst stock performance for over four years in the US.
Analysts feared that almost universal interest rate rises could begin to take their toll on businesses, hence market confidence hit rock bottom with widespread share sales driving prices and indexation figures down.
However, many companies have posted positive results since then, and the impact of tightening global economies seems not to have impacted upon company profits and performance too greatly.
The Dow Jones closed 92.8 points up, whilst the Dax and Cac in Germany and France were also up at the close. The Nikkei grew by 5.5 points, whilst the Hang Seng in Hong Kong also enjoyed a growth of in excess of 169 points.
The FTSE 100 in London closed down 9.1 points over the course of yesterday, although recovered through the morning today, up by over 124.2 points by midday.
With strong trading over the course of today, stock markets look set to continue their positive growth worldwide, as the takeover trend in recent years continues to remain strong in spite of higher interest rates.
Both the Bank of England and the European Central Bank are expected to make decisions on interest rates this Thursday, which could have a further knock-on effect on the performance of stock markets across Europe.
US Unhappy With WTO Proposal
July 31, 2007
The US government has issued a warning to the World Trade Organisation, that it doesn’t support new plans for a world trade deal.
The World Trade Organisation (or WTO) is concerned largely with regulating the balance of international trade amongst countries worldwide, and is getting set to debate draft plans for a worldwide trade initiative in September.
But the US have said they are unhappy with the form in which the agreement has taken, particularly with regards to ambiguity in agriculture, services and non-agricultural manufacturing.
According to US ambassador Peter Allgeier, once more light can be shed on the precise details of the treatment of these three subcategories, it may be easier for the US to commit to a deal.
Despite the deadlock, government officials have said they would be willing to continue talks, which began in 2001, to thrash out a deal after all.
The Doha round of talks have been going on for 6 years so far, and although a great deal has been achieved in that time, there are still fundamental aspects affecting the reaching of a satisfactory conclusion in the form of a worldwide trade deal.
Nations worldwide have been at loggerheads debating the intricacies of an international free trade deal, in which developed and developing nations have come to blows over tariffs, and market access.
But the WTO believes that in order to find any deal, there will have to be compromise from all quarters if a deal is to be reached any time soon.
“It is important that everybody be fit and ready on the starting line at that time. We have already come a long way in this round, and the distance left to go is not so great. But it will require an extra effort”
US Economy Back On Track?
July 30, 2007
The US economy has shown some signs of recovery over the last few days, with falling oil prices and rising economic growth.
Some experts are predicting that global economic factors, combined with an apparent turnaround in the fortunes of the US economy could lead to prosperity quicker than many had hoped.
The news comes just days after figures have shown the US economy has grown beyond the 3.2% forecast, at 3.4% suggesting a turn in the misfortunes the economy has seen over the last year.
Many have taken this as an indicator of an improving economic climate, which has been praised by President Bush as ‘resilient’ in the face of wider macro-economic problems.
The crisis in mortgage lending amongst the sub-prime market, which provides finance to those with poor credit histories, has seen a catastrophic downturn in US housing, and power problems at oil refineries nationwide have led to spiraling gasoline and fuel prices over recent months, bogging down the economy and creating sluggish growth.
However, with growth exceeding expectations, and fuel prices plummeting, it appears that the US economy may have left its worst patch behind.
Over the last few weeks, the US has also improved in manufacturing exports, and consumer spending has shown signs of growth. Additionally, high oil prices resulting in an increase in the trade deficit look soon to be a thing of the past as Iran and OPEC have both hinted towards stepping up production over the coming months.
Experts have warned, however, that increasing economic prosperity may lead to inflationary pressures, and that is important to avoid complacency.
Many analyst forecasts suggest that despite the housing market crisis, the US economy could be well back on track within the year, provided Wall Street confidence remains high and the economy avoids further disasters like that in the housing sector.
Gasoline Prices Fall
July 30, 2007
The price of gasoline at US pumps has fallen to an average of $2.88, down a substantial 17 cents from earlier in the month, with increasing supply helping to curb the rising prices.
The figure is taken as a national average for self-service, unleaded petroleum at retail stations, and reflects an overall fall in the price of manufacturing gasoline, and increasing efficiency in US refineries to maximise output.
The figures were averaged at 27 July, at which point the price sat at $2.8843/gallon. This is contrasted against the results of July 13, in which the average came out at $3.0577, after US refinery issues led to decreased capacity.
Now, refineries across the US are re-establishing output, hence flooding the market with the supply it so desperately craves to maintain stable prices and fuel the US economy.
Oil refinery problems in the US are partially to blame for world oil prices rising, according to oil cartel OPEC, who claim that outages have led to the spiraling prices of recent weeks.
Now that capacity has been restored, prices have fallen by around 30 cents a gallon from the May 18 high of almost $3.20, which highlighted a major struggle for fuel throughout the US, and has almost certainly contributed to poor economic performance over the last few months.
It is thought that prices will remain fairly stable for the time being with a relatively balanced demand matching supply, despite remaining widespread variations in price from the average.
Prices range wildly throughout the US, from as little as $2.65 a gallon in Cleveland, Ohio, through to almost $3.30 in Chicago, which boasts the highest average price for self service unleaded gasoline in the United States.
Many analysts are predicting further price reduction later on this year, when OPEC is expected to step up worldwide crude oil production.