Monthly Archives: March 2011

Consumer Spending Increases at Risk of Rising Commodity Prices

Consumer spending rose a higher than expected 0.7% for the month of February, a 0.3% increase after adjusting for inflation. This marked the 8th consecutive month of consumer spending increases. Consumer spending increases are generally indicative of a recovering economy as consumer spending accounts for over 70% of economic growth as measured by Gross Domestic Product (GDP). More positive news, from a GDP growth perspective, could also be found in reports that showed Personal Income increasing 0.3% last month and the Savings rate falling to 5.8%.Read more

Japan’s Potential Nuclear Impact on the Economic Recovery

In addition to the real threat of a nuclear disaster in Japan based upon damage sustained at a nuclear plant in northeastern Japan following the recent 9.0-magnitude earthquake, and ensuing tsunami, that decimated the Far East country late last week, collateral damage to the mounting global economic recovery is also expected.Read more

Cash is King

One of the primary drivers behind a lot of the optimism on Wall Street for 2011 is the relative health of the balance sheets of U.S. corporations. Many corporations seem to have learned their lessons from the great credit crisis of 2008 and, in turn, taken the opportunity to de-leverage (i.e. reduce their own respective levels of debt). Given the growth in corporate earnings in 2010 and the overall lack of corporate spending, cash on corporate balance sheets has ballooned.Read more

Could Oil’s Rise put a Halt to the Current Bull Market?

Recent turbulence in middle-east countries, such as Tunisia, Egypt and Libya, has affected both oil markets and stock markets worldwide due to the well-recognized role of Oil as the lubricant of the global economic machine. We, at Hennion & Walsh, have even observed a growing negative correlation between the price of oil and the performance of the stock market.Read more