Carmakers Confirm Weak European Sales (Reuters)
Varying degrees of pessimism are leaking out of the Geneva car show this year. Stephen Odell, Ford‚??s (F) European Business leader said he expects sales to continue ‚??running along the bottom‚?Ě of forecast estimates for the first half of the year. While German-car maker BMW predicted a longer-term problem, ‚??We believe the underlying problem in Europe‚?¶ will persist for at least five more years.‚?Ě With car sales already at a 17 year low, the European market can‚??t take many more down years.
China Sets the Bar Lower with Growth of 7.5 Percent (YahooFinance)
After decades of double-digit percentage increases in economic growth, investors should know that China is easing off the throttle, aiming for 7.5 percent growth in 2013. To achieve this growth, China will turn its attention to domestic consumption, rather than focusing on investment and exports. However, once Xi Jinping is named president during the People‚??s National Congress, he‚??ll have the difficult task of balancing the country‚??s rising housing prices with the need for domestic consumption, so that there‚??s still domestic growth but home prices aren‚??t out of reach for the average Chinese consumer.¬† It will be no small task, but Xi will have the entire year to pull it off.
With ‚??Just‚?Ě $782 Billion Spent, U.S. Consumers Take a Breather‚?¶ (Bloomberg)
Americans zoomed past the $780 billion mark in recreational goods, vehicles and services purchased in 2012 — or 6.9 percent of total consumption. This figure is down slightly from the 7.4 percent spent on recreational goods in June 2008, before the recession. Analysts claim this reduction is due to an ‚??overhang of a frugality psyche‚?Ě or the inability of U.S. consumers to spend so much on recreational options — especially after the Great Recession. Stuart Hoffman, chief economist for PNC Financial Services Group in Pittsburgh, said ‚??consumers still are budgeting for recreational activities as though there‚??s been no improvement in the economy.‚?Ě Of course they are, and why wouldn‚??t they? The last thing they want is to get caught flat-footed if recession 2.0 hits.¬† And this mentality will remain in place for quite a while. So investors beware‚?¶