Saturday, June 15, 2002

American jitters Doubts about the valuation of American shares have led to jitters on stockmarkets the world over. America’s economic growth and productivity both seem to be strong. However, investors are worried about the size of the current- account deficit, and its implications for the value of the dollar "Foreigners, worried about the size of America’s current-account deficit—4% of GDP and growing —have started to sell dollar assets. Partly as a result, the American currency hit a 17-month low against the euro, at $0.95, on June 12th, marking a decline of nearly 14% since last July. And, just when investors need reassurance, the continuing drip-drip of corporate and Wall Street scandals sends exactly the wrong signal. With investors feeling so bearish, stockmarket indices around the world have lost most of the gains made after a concerted round of interest-rate cuts followed the terrorist attacks on New York and Washington last September. This week the Nasdaq-100 index closed at its lowest level since January 1998. The Dow Jones Industrial Average fell by 3.4% last week alone and this week touched a seven-month low of just below 9,500. Markets in Europe and Asia were also effected. This week ended on a grim note, with markets everywhere in turmoil." 10:43:06 AM  Google It!  comment  []

Consumer Confidence Is Down This Month "The University of Michigan said its consumer sentiment index fell to 90.8 in June from 96.9 in May. That is the largest decline since a 9.7-point decrease in September. Production at factories, utilities and mines rose 0.2 percent last month after a 0.3 percent gain in April, the Federal Reserve said." "Flagging confidence and production came after a larger-than-expected drop in retail sales last month and add to a picture of slowing growth." "Concerns about the threat of more terrorist attacks and a lack of faith in corporate accountability that has sent stock prices tumbling may prompt consumers to rein in spending and slow the economy's rebound, economists said. That may help explain declines in sales at retailers." 10:11:01 AM  Google It!  comment  []