We need to find a fairer way of providing Goods and Services to the rest of the people on Earth.Cryptocurrencies and/or Gold Standard of money....maybe the answer to fight hyperinflation caused by too much printing of paper/fiat currencies by Governments and Central Banks all over the World. (https://nomorefiatmoneyplease.blogspot.com)
US: Walls St opens lower on China, N.Korea worries
US stocks opened sharply lower on Wednesday after China allowed its currency to weaken further and oil prices slid to their lowest in more than 11 years.
PHOTO: BLOOMBERG
[NEW YORK] US stocks opened sharply lower on Wednesday after China allowed its currency to weaken further and oil prices slid to their lowest in more than 11 years.
Geopolitical concerns were also heightened after North Korea said it had tested a hydrogen bomb and Saudi Arabia cut ties with Iran.
The Dow Jones industrial average fell 159.84 points, or 0.93 per cent, to 16,998.82, the S&P 500 19.19 points, or 0.95 per cent, to 1,997.52 and the Nasdaq Composite 73.90 points, or 1.51 per cent, to 4,817.53.
The US economy's service sector expanded in December, but at its slowest pace in 20 months, according to an industry report released on Wednesday.
PHOTO: AFP
[NEW YORK] The US economy's service sector expanded in December, but at its slowest pace in 20 months, according to an industry report released on Wednesday.
The Institute for Supply Management (ISM) said its index of non-manufacturing activity fell to 55.3 from 55.9 the month before. The reading, the lowest since April 2014, was just below expectations of 56.0 from a Reuters poll of 67 economists.
A reading above 50 indicates expansion in the service sector and a reading below 50 indicates contraction.
The business activity index rose to 58.7 from 58.2 the month before. That was just above expectations of 58.4 The employment index rose to 55.7 from 55.0 a month earlier. New orders climbed to 58.2 from 57.5. The prices paid index fell to 49.7 from 50.3.
The US economy's manufacturing sector contracted further in December, according to an earlier ISM report.
New orders for US factory goods fell in November and inventories declined for a fifth straight month, the latest indication that economic growth braked sharply in the fourth quarter.
PHOTO: AFP
[WASHINGTON] New orders for US factory goods fell in November and inventories declined for a fifth straight month, the latest indication that economic growth braked sharply in the fourth quarter.
The Commerce Department said on Wednesday new orders for manufactured goods slipped 0.2 per cent after a downwardly revised 1.3 per cent gain in October. The decline was in line with economists' expectations. Orders were previously reported to have increased 1.5 per cent in October.
The report added to weak construction and exports data in suggesting that gross domestic product growth slowed to a crawl in the final three months of 2015 as the economy battled a buoyant dollar, an inventory bloat and relentless spending cuts by energy firms, which have been hurt by lower oil prices.
Economists this week slashed their fourth-quarter GDP growth estimates by as much as one per centage point to as low as a 0.5 per cent annual pace. The economy grew at a 2.0 per cent annual rate in the third quarter.
Manufacturing, which accounts for 12 per cent of the economy, has borne the brunt of the economic headwinds and is likely to remain under pressure, at least through early 2016. A survey on Monday showed manufacturing activity contracted in December for a second straight month.
Orders excluding transportation fell 0.3 per cent in November after edging up 0.1 per cent in October.
The Commerce Department also said orders for non-defense capital goods excluding aircraft - seen as a measure of business confidence and spending plans - fell 0.3 per cent instead of the 0.4 per cent drop reported last month.
Shipments of these so-called core capital goods, which are used to calculate business equipment spending in the GDP report, dropped 0.6 per cent in November instead of the 0.5 per cent decline reported last month.
Inventories of factory goods fell 0.3 per cent after slipping 0.2 per cent in October. The inventories-to-shipments ratio fell to a still lofty 1.35 from 1.36 in October.
There were, however, glimmers of hope, with unfilled orders at factories rising for a second straight month. Shipments rose for the first time in four months.
Singapore's Ministry of Foreign Affairs on Wednesday said it is "gravely concerned" by the Democratic People's Republic of Korea's (DPRK) announcement that it has conducted a hydrogen bomb test. Singapore intends to make its views known to the DPRK through its ambassador in Singapore.
PHOTO: REUTERS
Singapore's Ministry of Foreign Affairs on Wednesday said it is "gravely concerned" by the Democratic People's Republic of Korea's (DPRK) announcement that it has conducted a hydrogen bomb test. Singapore intends to make its views known to the DPRK through its ambassador in Singapore.
"This is a dangerous and provocative act with serious implications on the peace and stability of the region and the DPRK itself. It is also a clear breach of the relevant UN Security Council resolutions," the ministry said in a statement. "We strongly call upon the DPRK to desist from further such actions, and reiterate our long standing call for the DPRK to abide by its international obligations and commitments."
Fed's Fischer says four rate hikes in 2016 'in the ballpark'
Federal Reserve Vice Chairman Stanley Fischer said that the median of policy maker forecasts predicting four quarter-percentage point interest-rate increases in 2016 was "in the ballpark" though it wasn't possible to know the exact number now.
PHOTO: BLOOMBERG
[WASHINGTON] Federal Reserve Vice Chairman Stanley Fischer said that the median of policy maker forecasts predicting four quarter-percentage point interest-rate increases in 2016 was "in the ballpark" though it wasn't possible to know the exact number now.
"The reason we meet eight times a year is because things happen, and as they happen you want to adjust your policy," Mr Fischer said in an interview Wednesday on CNBC.
Mr Fischer's remarks come three weeks after the Fed raised interest rates for the first time in almost a decade. Policy makers said at the time they would continue to monitor real and expected progress on inflation, which remains below their 2 per cent target, as they contemplate when to raise again.
Minutes of the Dec 15-16 Federal Open Market Committee meeting are scheduled to be released at 2 pm in Washington.
Trade gap in US narrowed in November on bigger drop in imports
America's trade deficit shrank in November as a decline in imports exceeded a drop in the value of shipments abroad.
PHOTO: BLOOMBERG
[WASHINGTON] America's trade deficit shrank in November as a decline in imports exceeded a drop in the value of shipments abroad.
The gap narrowed 5 per cent to US$42.4 billion from a revised US$44.6 billion in October that was wider than previously estimated, the Commerce Department reported Wednesday. The median forecast in a Bloomberg survey of economists called for a November deficit of US$44 billion.
Imported merchandise, primarily consumer goods, decreased to the lowest level since February 2011 and is partly explained by the limited progress companies made getting inventories more in line with demand. At the same time, persistent dollar strength and weakness in global markets continued to reduce overseas sales, indicating trade will do little to spur the US economy.
"There are two things happening: one is the strong dollar, which is making US exports less competitive while making US imports more inexpensive all else equal, and the global economy is softening," Joseph LaVorgna, chief US economist at Deutsche Bank Securities Inc in New York, said before the report. "That's a double whammy in the trade calculus."
After eliminating the effects of price fluctuations, which generates the numbers used to calculate gross domestic product, the trade deficit narrowed to US$59.6 billion in November from US$61 billion the previous month.
Imports of goods and services decreased 1.7 per cent to US$224.6 billion, marking the third consecutive month of declines. Companies shipped in US$3 billion less of consumer goods excluding motor vehicles. More than half of the decrease from a month earlier was due to a drop in the value of mobile-phone imports.
Falling commodity prices also weighed on the value of imported industrial supplies, including petroleum, chemicals and steel.
The US imported an unadjusted US$10.7 billion worth of petroleum-related products. The trade shortfall excluding petroleum shrank to US$37 billion in November from US$40.1 billion.
The average price of a barrel of imported oil dropped to US$39.24 in November, the lowest since February 2009. That helped the US reach a record surplus in goods trade with Opec nations on an unadjusted basis. Imports from Canada were the lowest since July 2010.
Exports of goods and services fell 0.9 per cent to US$182.2 billion in November, the lowest since January 2012.
Depending on global demand, those figures may shift after President Barack Obama last month signed a spending bill that also repealed broad limits against exports of unrefined crude oil that had been in place since 1975, when supply shortages had Americans lining up for hours to fill their gas tanks.
US private sector adds most jobs in a year in December: ADP
US private employers added 257,000 jobs in December, well above economists' expectations, a report by a payrolls processor showed on Wednesday.
PHOTO: AFP
[NEW YORK] US private employers added 257,000 jobs in December, well above economists' expectations, a report by a payrolls processor showed on Wednesday.
Economists surveyed by Reuters had forecast the ADP National Employment Report would show a gain of 192,000 jobs, with estimates ranging from 150,000 to 230,000. The increase was the largest since December 2014.
Private payroll gains in the month earlier were revised down to 211,000 from an originally reported 217,000 increase.
The report is jointly developed with Moody's Analytics.
The ADP figures come ahead of the US Labour Department's more comprehensive non-farm payrolls report on Friday, which includes both public and private-sector employment.
Economists polled by Reuters are looking for US private payroll employment to have grown by 195,000 jobs in December, down from 197,000 the month before. Total non-farm employment is expected to be 200,000.
The unemployment rate is forecast to stay steady at 5.0 per cent from the 5.0 per cent recorded a month earlier.
China may have 'hard landing' amid credit bubble, Faber says
The Chinese economy may be headed for a "hard landing" as borrowers are taking on record amounts of debt to repay interest on their existing obligations, said Marc Faber.
PHOTO: BLOOMBERG
[ROME] The Chinese economy may be headed for a "hard landing" as borrowers are taking on record amounts of debt to repay interest on their existing obligations, said Marc Faber.
"We had a hard landing in the stock market already and we had a hard landing in commodities and we might have a hard landing in the economy," Mr Faber, the publisher of the Gloom, Boom & Doom Report, said in an interview with Bloomberg Television's Francine Lacqua on Wednesday.
"We have a colossal credit bubble in China."
After a 7 per cent selloff at the start of the year, China revived intervention to stop some of the world's biggest investors from fleeing its US$6.5 trillion stock market. State- controlled funds bought equities on Tuesday, according to people familiar with the matter. The securities regulator signaled a selling ban on major investors will remain in place beyond its scheduled Jan. 8 expiration, they said.
"How it will unwind, we don't know," Mr Faber said, adding that there might be a cut in investments in research and development. "It could also happen through significant weakness in the economy and some sectors of the economy in China, like steel production, they already have experienced hard landing. My sense: I would rather be overly cautious on China than overly optimistic."
After reviewing what he sees as the buildup of a global asset bubble, Mr Faber said: "I think that the next thing that will happen is that all the asset markets, like the Titanic, will crash."
German private sector set for strong growth in early 2016: PMI
Germany's private sector expanded at its fastest pace in nearly 1-1/2 years in December, a survey showed on Wednesday, with growth in new business suggesting companies were set for a strong start to 2016.
PHOTO: REUTERS
[BERLIN] Germany's private sector expanded at its fastest pace in nearly 1-1/2 years in December, a survey showed on Wednesday, with growth in new business suggesting companies were set for a strong start to 2016.
Markit's final composite Purchasing Managers' Index, which tracks activity in the manufacturing and services sectors that together account for more than two-thirds of the economy, rose to 55.5 in December from 55.2 the previous month.
That was well above the 50 line that separates expansion from contraction for the 32nd month running and also higher than a preliminary flash estimate of 54.9.
Service sector activity hit a 17-month high as new business continued to grow at a robust pace and firms in this sector were feeling more optimistic about their outlook for the next 12 months than at any point since March 2015. "The combination of strongly rising new business levels and a further accumulation of work outstanding suggests that companies will remain in expansion mode as we move into 2016," said Markit economist Oliver Kolodseike.
To handle the strong inflow of new business and growing backlogs of work, service providers stepped up hiring, sending the rate of job creation to its highest level since June 2011.
The unemployment rate in Germany is at 6.3 percent, its lowest level since reunification in 1990, and Kolodseike said the PMI data suggested it could drop even further.
The positive service and composite PMI readings come on the back of a survey of manufacturers earlier this week which showed factory activity rising at the end of 2015.
Eurozone business growth picks up in Dec as firms take on staff: PMI
Eurozone private sector growth accelerated more than initially thought in December as firms took on staff at the fastest pace in almost half a decade, a survey showed on Wednesday.
PHOTO: AFP
[LONDON] Eurozone private sector growth accelerated more than initially thought in December as firms took on staff at the fastest pace in almost half a decade, a survey showed on Wednesday.
The pickup in activity, however, came at the cost of companies cutting prices again, Markit's Purchasing Managers'Index showed, and the data may lead to renewed calls for further stimulus from the European Central Bank.
So far, the ECB has failed to lift inflation anywhere near its 2 per cent target ceiling despite buying 60 billion euros a month of mostly government bonds since March 2015.
Official data on Tuesday showed that annual inflation stood at 0.2 per cent in December, lower than expectations, while a core measure excluding energy and food prices slowed for the second straight month.
"Given that we have seen almost a year's worth of quantitative easing, there is a concern that policy is proving somewhat ineffectual," said Chris Williamson, chief economist at survey compiler Markit.
He said the survey pointed to mild economic growth in the final three months of 2015. "Despite the improvement, the survey data signal a modest 0.4 per cent increase in gross domestic product (GDP) in the fourth quarter, which would mean the eurozone grew 1.5 per cent in 2015," he said.
The PMI for the bloc's dominant service industry was 54.2, unchanged from November but up from a flash reading of 53.9. That helped pull the final composite PMI up to a four-month high of 54.3 from November's 54.2, higher than an earlier estimate of 54.0.
The composite output price index for December was stable at 49.5, the third month below the 50 mark that separates growth from contraction, suggesting it could take even longer for inflation to rise to near the ECB's target.
But firms added new jobs at the fastest rate since May 2011 anticipating better business this year. The employment sub-index was 52.8 in December from 52.2.
The unemployment rate in the eurozone has steadily declined over the past year, although at 10.7 per cent in October it was still double the rate of that in the United States and varying widely between countries of the monetary union.
Last year also closed with strong business expansion in Italy, the composite PMI for which hit its highest point in almost five years.
