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Strong

Fed likely to slow bond buys despite tepid economy

Hiring is soft. Pay is barely up. Consumers are cautious. Economic growth has yet to pick up.

And yet on Wednesday, the Federal Reserve is expected to take its first step toward reducing the extraordinary stimulus it's supplied to help the U.S. economy rebound from its deepest crisis since the Great Depression.

If it does, the Fed will likely spark a debate: Has the economy strengthened enough to withstand the pullback?

The answer might not be clear for months.

The Fed is meeting this week at a time of deepening uncertainty about who will succeed Chairman Ben Bernanke when his term ends in January. On Sunday, Lawrence Summers, who was considered the leading candidate, withdrew from consideration. [Read more...]

China, U.S. & Inflation

In light of today's positive economic data out of China, I thought I would reproduce a segment from NFTRH 255 (9.8.13) that speculated upon the possibility of a new up cycle in inflation expectations based in large part on China and its credit growth cycle (on which central planners have announced a planned clampdown). 

China industrial, retail data beat forecasts

The Greenspan Fed provides a handy reference as to how long it can take for a withdrawal of policy to manifest in a new economic deceleration. [Read more...]

Nokia stock surges on Microsoft takeover

Microsoft Corp.(NASADAQ:MSFT) is buying Nokia Corp.'s (NYSE:NOK) line-up of smartphones and a portfolio of patents and services in an attempt to strengthen its fight with Apple Inc. and Google Inc. and capture a slice of the lucrative mobile computing market.

The 5.44 billion euros ($7.2 billion) deal announced late Monday marks a major step in the company's push to transform itself from a software maker focused on desktop and laptop computers into a more versatile and nimble company that delivers services on any kind of Internet-connected gadget.

"It's a bold step into the future a win-win for employees, shareholders and consumers of both companies," Microsoft CEO Steven Ballmer told reporters at Nokia's headquarters in Finland Tuesday. "It's a signature event." [Read more...]

Nasdaq takes some blame for 3-hour breakdown

A three-hour trading outage on the Nasdaq last week was partly the result of issues within the company's control, the Nasdaq OMX Group said Thursday.

In a statement, the company detailed some of its early findings from an internal review. The Nasdaq blamed "a confluence of unprecedented events" that overwhelmed the exchange's system for handling price information. It said the catalyst was a torrent of messages from a trading platform run by the New York Stock Exchange, Arca.

"NASDAQ OMX is deeply disappointed in the events of August 22," the statement said, "and our performance is unacceptable to our members, issuers and the investing public."

The outage cracked the midday calm of a quiet summer day on Wall Street, sending brokers and traders scrambling to figure out what went wrong. Suspicion immediately fell on high-speed trading. [Read more...]

Orders for long-lasting US factory goods plunge

Orders for long-lasting U.S. factory goods fell sharply last month as demand for commercial aircraft plummeted and businesses spent less on computers and electrical equipment.

The Commerce Department said Monday that orders for durable goods plunged 7.3 percent in July, the steepest drop in nearly a year. Excluding the volatile transportation category, orders fell just 0.6 percent. Both declines followed three straight months of increases.

Durable goods are items meant to last at least three years. The drop suggests manufacturing continues to struggle after starting the year weak. [Read more...]

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