It is Monday, so let’s start off with the “Who cares?” portion of the week.
- Credit rating agency Standard & Poor’s on Monday upgraded its credit outlook for the United States government to “stable” from “negative.”
I couldn’t care less and it seems an upgraded credit rating from one of those useless agencies means little to the market as well. Me thinks it should mean little to you as well.
Okay, so if the “big” news about the US credit rating is not moving the market, what does the market care about today?
- China’s industrial output grew 9.2 percent in May and retail sales rose 12.9 percent, in line with market expectations but little changed from the previous month’s growth, adding to evidence of a lack of traction in the world’s second-largest economy.
The above news is out there, along with the S&P credit status blockbuster, and the market is now in the green (for the moment anyway). It appears the news from China is not upsetting the market either. Despite all the nonsense about China’s economy losing traction, its economic momentum is slipping, and whatever other negative descriptors the breathless media has put out, China’s economy is doing just fine, as we see in the data above and as we see in the reflection of official policy below.
- The government of President Xi Jinping and Premier Li Keqiang has flagged for some time that the rapid GDP growth of the past three decades needed to shift down a gear as the economy moves towards consumer-led expansion.
- China’s new leaders have adopted a greater tolerance for a slowdown in the economy than their predecessors and are likely to allow quarterly growth to slip as far as 7 percent before triggering fresh stimulus to lift activity, sources say.
- China is committed to accelerate economic reform, move faster to a consumer-driven economy and expand imports, while strongly opposing all forms of protectionism, Vice Premier Zhang Gaoli said.
As long as we are looking at China, let’s take a closer peek at a piece of data that sends a positive signal to the market that China is nowhere near falling off the economic edge.,
- Fixed-asset investment, an important driver of economic activity, grew 20.4 percent in the first five months from the same period last year.
Things are still humming along over there, and underneath it all, the market likes what it sees happening there, and it might also like what it see China doing here in the USA.
- With over $10.5 billion of deals by Chinese companies in the United States so far this year, 2013 is on pace to be the largest year ever for mergers and acquisitions of U.S. firms by Chinese companies.
That’s a lot of dough coming this way from an economy on the precipice. The amount is impressive, but more important than the money Chinese companies have to spend, keep in mind where they are spending it – here in the USA.
Moreover, why would they be doing that anyway? The current meme in the media culture is that the US is in a new normal, one characterized by slow growth, fewer high-paying jobs, fewer jobs altogether, and an in ability to find workers to fill the high-skilled jobs created from the New Economy.
- The auto industry is about to go on a hiring spree as car makers and parts suppliers race to find engineers, technicians and factory workers to build the next generation of vehicles.
So, the auto industry, which, by the way, employs millions in all its forms, has a need for highly skilled folks, college educated mind you, and factory workers, who, by the way, need an educations as well because the days of their fathers hand screwing cars together are over. Today’s auto factory workers need computer skills, robotic savvy, and a willingness to step bravely into a whole new world, a world that is just now busting open.
- The new employees will be part of a larger, busier workforce. From coast to coast, the industry is in top gear. Factories are operating at about 95 percent of capacity, and many are already running three shifts. As a result, some auto and parts companies are doing something they’ve been reluctant to consider since the recession: Adding floor space and spending millions of dollars on new equipment.
The auto industry is busting out and China is tightening its belt. Two contrary notions that when put side by side look like something the market will like for some time to come..
Trade in the day; Invest in your life …
