Morning News Roundup
Posted by vriz on 04/10/2009
The Dow closed above 8,000 points at 8,083.38 on Thursday—its best performance since February 9. Policymakers in Washington are loath to do anything to spook the markets that seem to be on the upward trajectory recently. So, the Fed told the banks (Citigroup Inc., Goldman Sachs and others) that are undergoing stress tests in order to determine whether or not they are undercapitalized to “keep quiet" about the results. Stocks and most U.S. Markets are closed today for Good Friday. Even as the stock market is picking up, the concerns about the economy do not abate. Economists participating in the latest Wall Street Journal forecasting survey expect the recession to end in September. By the “end of recession” the WSJ means a return to GDP growth, and the economic consensus seems to be that by the third quarter, U.S. GDP will cross into the positive territory with an expected modest growth of 0.4 percent. However, the predictions for the labor market are not that rosy: most surveyed economists don’t see unemployment declining until the second half of 2010. Meanwhile the economic stimulus money from the $787 billion American Recovery and Reinvestment Act signed by President Obama six weeks ago is starting to arrive in the states. But it’s just a slow trickle, so far. The White House officials say the bulk of the money will start hitting the streets later this year and early next year, with the goal of spending 70 percent of it by the summer of 2010. As of Tuesday, $54 billion from the package had been "obligated," meaning that states, cities or other recipients could begin drawing from it, and $11.7 billion of that had been disbursed. And Chinese government reported today that the country’s exports declined 17.1 percent compared to a year earlier. This is less than forecasted and also less than the decline in imports. Friday’s export figures showed a drop in shipments to Europe of 20 percent and a decline of exports to the U.S. of 12.6 percent from a year earlier.
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