Monday, May 4, 2015

Wall St. Pushes Near Record Levels

I found this interesting article (Link here) focusing on how today on Wall Street was near record high numbers as investors assessed corporate earnings. This article also talked about how stocks have gotten a lift from a March report that was released showing that for the first time since last summer that factory orders are on the rise. Also this article goes on to state, "Near midday, the Dow Jones industrial average rose 0.40 percent and the Standard & Poor’s 500-stock index was up 0.39 percent. The Nasdaq composite index gained 0.42 percent." It continues by explaining in more length about the rise in factory orders by saying, "Orders to American factories rose in March for the first time since last July, breaking a long stretch of weakness in manufacturing. Orders increased 2.1 percent following seven monthly declines, the Commerce Department reported Monday. Also, orders in a significant category that tracks business investment plans eked out a 0.1 percent rise. It was the first advance in the category since last August."

Another point this article makes is by looking into European markets, that Greece has made progress with its creditors over this past weekend on how to avoid bankruptcy. They were able to do this by coming up with several economic reforms and budget measures to be able to secure the rest of its bailout. Without this 7.7 billion dollars Greece faced the possibility of bankruptcy in the coming weeks and being removed from the Euro. 

A final area this article points out is China. It goes on to say, " The Communist Party’s Politburo met last week and promised “forceful” measures to support economic growth that slumped to 7 percent in the first quarter, its lowest level since the aftermath of the 2008 financial crisis. The party leadership called for increasing investment and streamlining the flow of money through the financial system."

What are your thoughts about this resurgence in the US market? Do you think Greece is on the right track to fix its economy? What do you think China should do to help manage their slumping economy? 

5 comments:

  1. There is a lot of variation in topics here in this article, and it's overall presentation is quite positive (for the most part). Especially in light of some maybe more dreary articles or opinions that have been floating around. Good for Greece on making some steps in the right direction; is it enough progress to indicate that the country is going to be able to avoid leaving the euro? Obviously not. Does anyone know when Greece has to come up with reform proposals to creditors by? As we've said many times, I don't think the eurozone will ultimately let Greece leave in fear of greater consequences. As for China, there is a lot in the media about this slowdown. But like we've discussed in the blog before, I still don't think this is necessarily indicative of more turmoil to come. In a separate blog post Shelby and others mentioned that the slow down has been inevitable; it had to happen at some point. I agree and don't see this as a huge problem in the long run or the grand scheme of things. As for the US, no doubt this article presents positive news for the country.

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  2. This article puts a very positive spin on the recent surge in the US stock market. However, it does not mention what we have talked about in class and in other blog posts that our stock market is due for a correction soon. Investors are making out very well right now as we reach the peak, but economists have predicted that a crash will soon occur. I think it would be interesting to further discuss and research how significant analysts predict the correction will be.

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  3. I agree that the article is rather positive about the recent gains in the stock market. These increases are certainly good, they show growing investments and greater confidence in the economy. However, I'm wary of getting too excited about the stock market, as we've seen that it is such an easily upset balance. I don't know if it is the best measure of a rebound for the US.

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  4. I agree with Shelby and others about the need for skepticism when it comes to the positive outlook especially for the marginal growth in the US after seven long months of weakness in that area of the economy. As others have stated, Greece isn't going anywhere because, as Wolf said, Greece can't go anywhere. There is no choice but for the eurozone to maintain Greece or face horrific consequences. I feel that measuring the stock market isn't a good way to find if the market has rebounded since it fluctuates on such a daily basis.

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  5. Financial markets are just not that accurate of an indicator regarding the true economic well-being of a state. Many companies use leverage, stock buybacks, and dividends to financially engineer their earnings reports and share prices. Furthermore, it's earnings season and earnings reports greatly influence movements in the stock market, as does confidence in future manufacturing prospects, rather than our current manufacturing prowess. Last, aside from very obvious (and usually macroeconomic) events, we'll never know why the stock market moves the way it does. Proprietary information dominates, and by definition that info does not get widely disseminated.

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