Economy

The latest Survey of Business Confidence of the World conducted by Moody’s Economy.com said:

“Businesses are growing steadily less dour. Global business sentiment improved last week to its best level since last October. Confidence remains consistent with a continued global recession, but the downturn is moderating. Businesses are notably more optimistic regarding the outlook towards year’s end; expectations regarding the outlook are as strong as they have been since summer 2007 when the financial crisis began.”

A snapshot of the week’s US economic data is provided below.

June 26
Strong increase in Personal Income is temporary, Consumer Spending on track for decline in the second quarter.

June 25
First quarter real GDP minor upward revisions, outlook for second quarter unchanged.
Jobless Claims -- temporary setback or reversal of improvement?

June 24
Sales of new homes -- mixed bag of news.
Durable Goods Orders gather momentum, but shipments remain weak.

June 23
Existing-home sales -- inventories are declining.

June 22
Capital stock of the US economy – history.

The Federal Open Market Committee (FOMC) announced no change to monetary policy following its meeting on Wednesday. The communiqué said the Committee expected to keep the Fed funds rate target in the 0-0.25% range “for an extended period.” However, the comments regarding the current economic situation were somewhat more optimistic, saying that “the pace of economic contraction is slowing.”

 

The Fed’s quantitative-easing programs remained unchanged, targeting the purchase of mortgage-backed securities ($1.25 trillion), agency debt ($200 billion), and long-dated Treasury securities ($300 billion).

Summarizing the US economic outlook, Asha Bangalore (Northern Trust) said: “We are projecting a contraction of real GDP in the second and third quarters and a small increase in the final 3 months of 2009. The unemployment rate is expected to peak in the first half of 2010, while inflation will not present problems until 2011/2012.”

Week’s Economic Reports

Click here for the week’s economy in pictures, courtesy of Jake of EconomPic Data. Click here for a summary of this week's economic calendar from Yahoo.

Across the pond, the European Central Bank (ECB) will make an interest-rate announcement (Thursday, July 2), while in the US, economic highlights for the week include the following:



Markets

The performance chart obtained from the Wall Street Journal Online shows how different global financial markets performed during the past week.

“Never spend your money before you have it,” said Thomas Jefferson (hat tip: Charles Kirk). And when you do have it, let’s hope Minyanville will help you to invest wisely.