“STAND BACK, FRODO…This global economic growth news looks worrying”
Dow: 13,597 (+0.14%) S&P 500: 1,460 (-0.05%)
We know what you’re thinking: ‘Where’s The Fonz when you need him?’ After central banks pushed stocks in the US & Europe to multi-year highs with stimulus news recently, you too were probably expecting happy days. But troubling developments today only raised more concerns of a global economic slowdown. Bank of America is sacking 16,000 people by the end of the year and manufacturing is slowing down in the Philadelphia area…Japan, Europe, and China all had knee-shaking reports as well. Investors groaned through the day and realized that the growth promised by the central banks ain’t happening overnight. The Dow actually ended up 19 points, but there were 3 decliners for every 2 gainers in the stock markets as folks sobered up, waiting for the next growth driver.
Poor econ data released in China, Japan and US
Like mama used to say, when it rains, it pours. Here in the US, the number of Americans filing for unemployment since last week, known as weekly jobless claims, increased by 15,000 to reach 382,000 claims total. The jobs number was more than economists expected, while manufacturing in the Mid-Atlantic/Philly region shrank in September for the 5th straight month. Over in the Far East, a survey of manufacturing in China showed the industry contracted for the 11th month in a row and Japan’s exports dropped in August. Each bite of data, taken together, mixed into one unsatisfying mouthful of news for investors, who remain concerned that growth globally has clearly slowed. The only question now is what more central banks can do to help…
Bank of America, the largest US bank, to cut 30,000 jobs
Bank of America (BAC) announced today its goal of cutting 30,000 employees (16,000 by December) a year earlier than expected – the 2-part plan will save $8 billion by 2015 and bring their total workforce down to 260,000. The move will drop them from #1 in the American-bank-with-the-most-employees contest to 4th, behind JP Morgan, Citi and Wells Fargo. BoA used to be all about expansion – Leading up to the 2008 financial crisis, the North Carolina-based behemoth ate up competitors like it was starring in a Food Network show on bingeing. But purchases like Countrywide, a mortgage lender, hit the firm hard after housing market dropped out and the huge bank has suffered ever since. So CEO Brian Moynihan is telling shareholders he has to keep cutting costs from new regulations and an inconsistent economy to make the bank smaller/agile. BoA has already cut its assets, like unnecessary branches, by 7% in 2012 and the stock is up over 60% year-to-date (since January) after losing nearly 40% in the previous 2 years. Now that Moynihan has addressed the cuts, investors will be looking to see how he plans on boosting revenues…
Tomorrow:
- It may almost be officially fall, but tomorrow’s financial news schedule looks as light as a summer Friday
- Atlanta Regional Fed President Dennis Lockhart speaks at a conference in Georgia & the Bureau of Labor Statistics reports all “Mass Layoffs” in the US last month
© 2012 MarketSnacks
