Wednesday, 15 April 2009

US economy - A clear look

Wal-Mart’s Duke Sees ‘Lot of Stress,’ Slow Recovery for U.S.

Economy Watch

Manufacturing in the New York region contracted this month the least since September and the outlook for the next six months improved for a second time. The Fed Bank of New York’s general economic index rose to minus 14.7, better than forecast, from minus 38.2 the prior month when it reached its lowest level since data began in 2001, the bank said today.

The cost of living in the U.S. unexpectedly fell in March, underscoring Federal Reserve forecasts that inflation will be contained in coming months. The consumer price index decreased 0.1 percent compared with a 0.1 percent gain projected by the median forecast of economists surveyed by Bloomberg News, according to figures from the Labor Department.

U.S. equities were lowered to “underweight” at HSBC Holdings Plc, as the brokerage recommended investors buy into stocks in Asia, emerging markets and Europe to take advantage of falling volatility.

“What we’ve labeled the ‘volatility bubble’ may be about to deflate at last,” Kevin Gardiner, HSBC’s London-based chief equity strategist, wrote in a report. “The non-U.S. markets may do better if risk appetite revives.”

The VIX, as the Chicago Board Options Exchange Volatility Index is called, fell to a six-month low on April 9. The index, known as Wall Street’s “fear gauge,” measures the cost of using options as insurance against declines in the S&P 500.

Signs of slow recovery => U.S. Economy: Consumer Prices, Industrial Production Decline

“The more slack there is in the system, the longer it will take for inflation to become a concern,” said Carl Riccadonna, a senior economist at Deutsche Bank Securities Inc. in New York. “Production data look terrible. Things do not look good and this means the dramatic pace of layoffs we’ve been seeing in manufacturing for the last several months is likely to continue.”

=> Điều chỉnh lại kỳ vọng, not V curve, but will be a round bottom.

No comments: