·
Employment looking stronger…….Labor Department reporting today that job growth
accelerated in May to 217,000, and marked fourth straight month of job gains.
Economists believe strengthening employment data indicates Q1 softness was an
anomaly and U.S. economy is positioned for stronger growth.
What’s the
point? Improving job growth is
important for sustaining the economic recovery and, because of its size and
diversity, the U.S. economy is in a relatively stronger position to sustain
economic growth particularly compared to Europe. Over the past few weeks there
has been some increased sentiment that global economic growth would slow and
several economists have reduced their U.S. GDP forecasts. The general
consensus, however, continues to call for acceleration in U.S. GDP growth rate
as we move through 2014. This is positive for sustained growth of U.S.
corporate profits which, in turn, should be positive for U.S. equities. Link: http://money.msn.com/business-news/article.aspx?feed=OBR&date=20140606&id=17680783
·
IMF chides China on debt…..The World Bank and International Monetary Fund is out
today urging China to curb excessive credit growth in order reduce the risk of
bubble-type excesses in certain sectors of its economy, particularly real
estate.
What’s the
point? We think this is “old news”.
We have been hearing for many months now that China’s excess credit growth,
particularly its so-called “shadow lending”, may be contributing to rising financial
risk for China’s economy. Our sense is the Chinese authorities understand this
and are taking measures to reign in credit as they attempt to pilot their
economy to slower but more sustainable cruise speed. While it is now understood
that China’s economy is slowing, the fact that China is taking more concrete
actions to control credit is positive because it reduces the risk of bubble or
financial excesses, and improves the likelihood that China can sustain growth
on a more “organic” basis and not artificially induced growth through excess
credit. We believe this would be a positive for global financial markets. Link:
http://money.msn.com/business-news/article.aspx?feed=AP&date=20140606&id=17677201
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