27 Aug 2004

Posted at 16:05h in The Friday Brief by
The U.S. Economy grew at a 2.8% annual rate in the second Quarter as higher oil prices dampened consumer demand and as imports of record amounts of foreign goods created a record trade deficit.  Corporate profits after taxes, reported for the first time today, rose 17.9% in the 12 months ended in June.  Business investment in equipment and software was revised up to the strongest pace since the third quarter last year.  Consumer spending was revised upward in this report from last month’s preliminary number of 1% to 1.6%.  

20 Aug 2004

Posted at 16:07h in The Friday Brief by
Oil futures are now above $49.00 per barrel nearing the record highs (inflation-adjusted) reached during the oil embargo of the 1970’s. Iraq’s shipments have dropped about 1 million barrels a day from 1.8 million in April.  Oil prices have set records every day save one since July 30.  World oil traders are concerned that the reduced supply fromIraq,Russia, andVenezuelacannot be offset by other OPEC countries which are producing at full capacity. Saudi Arabiais the only country with capacity to offer and their oil minister said yesterday that they were prepared to pump as much as they could. 

13 Aug 2004

Posted at 16:09h in The Friday Brief by
Rising oil prices continue to drain optimism from the equity markets and from corporate managers.  Over 80% ofU.S.companies have reported their earnings now and on average they are up 40% over last year, according to the Wall Street Journal.  Advanced Industrial Equipment (1,974%), Coal (1,532%), Internet Services (946%), and Communications Technology (588%) are the leaders so far.  But while the latest earnings reports are generally good, managers such as Cisco’s John Chambers appear less certain about the future.  They say that their customers seem less enthused than they were earlier in the year.  The so-called energy tax appears to be having some degree of economic impact. 

30 Jul 2004

Posted at 16:13h in The Friday Brief by
The U.S. economy slowed to a 3% rate in the second quarter according to the government report just released.  The slower than expected growth was the result of rising energy prices and the weakest pace of consumer spending in three years.  Consumer spending which represents 70% of the economy increased only 1% after rising 4.1% during the first three months of the year.  The slowdown in GDP follows an upwardly revised 4.5% growth rate for the first quarter.  The bond market responded favorably to the news as the inflation pressures fall with slower growth.