Morning Market Roundup: Feds Discuss More Easing, FedEx Earnings Slump, G-20′s Plan for Growth
- Posted on June 19, 2012 at 9:18am by
Becket Adams
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Here’s what’s important in the business world this morning:
Fed Easing: The Federal Reserve is meeting this week at a time of high alert – over the slumping U.S. economy, the aftermath of the Greek elections and the shaky financial markets.
Whether that means it will announce any new action when its two-day meeting ends Wednesday isn’t certain. But many analysts think the struggles of the U.S. economy and the threats from Europe will compel the Fed to say or unveil something to try to boost confidence.
A major issue is Europe’s debt crisis. Do Fed officials think the Greek election results will help steady Europe’s economy because Greece now seems likely to remain in the euro currency union? Or do they worry that Europe’s crisis remains unresolved and could tip the global economy into recession?
Those concerns have flared just as U.S. employers have reduced hiring. U.S. retail sales and manufacturing output have weakened. The housing market is still far from healthy. Investors are edgy.
FedEx: FedEx says higher costs and slow global growth will crimp its earnings results over the next 12 months.
The world’s second-largest package delivery company is reporting lower results for the fiscal fourth quarter ended in May due to a charge for retiring some planes.
FedEx earned $550 million or $1.73 per share in the last quarter, compared with $558 million, or $1.75 per share, a year earlier. Revenue rose to $11 billion from $10.55 billion.
Without the charge, FedEx Corp. would have earned $1.99 per share, 4 cents better than Wall Street estimates.
G-20: The leaders of the world’s largest economies will portray themselves as united behind efforts to boost growth and job creation in order to repair a global economy roiled by fears over the European financial crisis, according to a draft of the statement to be released Tuesday at the end of the Group of 20 annual meeting.
It’s far from certain, however, that the reassuring words will sooth markets whose harsh judgment of the official response to the crisis appears to be pushing Europe closer to catastrophe by the day. On Monday, less than 12 hours after a Greek election quelled fears that the country could make a devastating exit from the Euro, fears about Spain drove that massive economy’s borrowing costs dangerously close to the level where it would need a bailout.
The statement by the G-20 leaders includes language that appears aimed at easing the Spanish crisis by reassuring investors that Spain‘s treasury won’t end up eating the costs of the up to 100 billion euro rescue of Spain’s banks announced this month. Fears that the responsibility of paying back the bailout would fall on its government helped drive Spain’s borrowing costs above the dangerously high 7 percent level.
More Single-Family Homes: U.S. builders started work on more single-family homes in May and requested the most permits to build homes and apartments in three and a half years. The Commerce Department said Tuesday that builders broke ground on 3.2 percent more single-family homes in May, the third straight monthly increase.
Overall housing starts fell 4.8 percent last month to a seasonally adjusted annual rate of 708,000. But that was entirely because of a 21.3 percent plunge in apartment construction, which can be volatile from month to month.
The government also said April was much better for housing starts than first thought. The government revised up the figures to 744,000 – the fastest building pace since October 2008.
Even with the gains, the rate of construction and the level of permits requested remain roughly half the pace considered healthy. Yet the increases add to other signs that the home market may finally be starting to recover nearly five years after the housing bubble burst.
The Associated Press contributed to this report.
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raderby
Posted on June 19, 2012 at 3:46pmAnd – ……………….. Audit the fed! Then the reason for dissolution of the fed will be clear to all, except progs.
Report Post »raderby
Posted on June 19, 2012 at 3:44pmBurn Yank Me needs a public execution – that might slow down the other progressives….
Report Post »CulperGang
Posted on June 19, 2012 at 2:27pmDISBAND the Federal Reserve private bankers. PROBLEM SOLVED. They are the cause of ALL of the worlds fiancial problems. ALL of them are PONZI players. Who are they trying to kid!!
TO JAIL YOU BASTIDS………and all will be rectified.
Report Post »Mr Sanders
Posted on June 19, 2012 at 1:53pmG20- they can talk all they want. You have to make the Private Sector happy again for them to move forward with any plans for hiring, producing products. More than that you need people that are ready TO consume products and services. In general, stability and the ability to plan for a 3-7 year period needs to be present; that environment just does not exist – but we need to keep pushing forward….somehow. They think bandaids to the max are going to make people/companies feel good. Exactly how does debt [servitude to a master that has no end in site] upon debt, upon debt make people feel, especially when they have to step up to the counter to pay the butcher’s bill?
Homes – there is still a lot of foreclosures pending, a lot of inventory currently unsold, and thankfully some projects are being built. Commercial properties are being built but a ton are still vacant [wanna talk about ghost cities] and that paper bubble has yet to happen. I agree with the premise that 20% down should be present [ maybe even 40% considering the drop in values] but building to turn-key right now is upside-down when compared to acquisition cost versus value at time of delivery. Right now its cheap to build but materials are on the rise with may-be reduced rates of labor inputs coming down a bit… but not much.
The Fed – QEIII = Disaster = Invites Wiemar Republic 2.0+
Anyone feel/doing better than they were 6 years ago? My spirit is rising but my econ is 40% lighter – anyone?
Report Post »PROSECUTE_PUBLIC_SERVANTS__FOR_CONSTITUTIONAL_TREASON
Posted on June 19, 2012 at 1:21pmThe banking cartel is different than gov.. Both consider you a slave to financially rape in taxes and interest for your entire life. The American dream is just a dream. Both the cartel and politicians want to control the marxist one world gov. overseen by the UN coming to your town.
Report Post »Both believe there are to many of you and billions will need to die in the next few years either by war or disease so there are enough resources for the remainder and elites. Both have protected their families an left your family helpless. The congress and executive branch, your state officials all have access to gov. bomb shelters and provisions. You have nothing. No offense but you and your family needs depopulated according to those who rule.
You watch TV and believe the crap you are fed electronically so when push comes to shove you will vote for the predetermined presidential victor and believe you did your part. If still alive after the coming world wars and revolution, you and your family if considered a threat to the gov. will be moved to a FEMA camp for interment within say the next 15 years.
You and the rest of your community have chosen this path by allowing evil people to rule. You are deserving of your future. I say this because you dispise Ron Paul. The only man in 40 years willing to make the sin of this country right and restore your freedom. O’ well. I will be in heaven and do not care if I die in the meantime for a righteous cause.
michael48
Posted on June 19, 2012 at 11:11amhow much are the Feds willing to pay me to borrow money????…after all I make $6.00 per hour and the dem-wit, gov. gumbas sold me a $750,000.00 house..that turned out real good…huh???
Report Post »NHwinter
Posted on June 19, 2012 at 10:33amGlobal Leaders???? I do not trust any politician anymore. They border on nuts and are lacking in any common sense. Their goal is a NWO and they could care less about the average person.
Report Post »chicago76
Posted on June 19, 2012 at 10:45amWell said. They are a bunch of counterfeiters and criminals bent on power and wealth and are willing to destroy anyone or any country in their way to get it.
Report Post »theblazerunner
Posted on June 19, 2012 at 10:20amstop paying taxes …starve the dam beast.
Report Post »shut it down
chicago76
Posted on June 19, 2012 at 10:44amWon’t work, they’ll just print more money like they are doing now. Power and greed are ruling the International banks and the governments of the US and Europe. Notice it was not the banks that lost in the housing bust. It was the average person who lost. The banks just printed more money to replace that lost. Nothing could increase the value of people’s homes because too many were built for people who could not pay for them. We lose banks win. Wealth is redistributed to those who are the wealthiest.
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