News-Analysis-for-the-Investor-on-May-1-2013 – Millionaire Corner

Economy creates only 119,000 positions in April

ADP reports that private companies created only 119,000 jobs in April, well below expectations and confirmation that the labor market is slowing.  According to CNBC,  economists expected the report to show the private sector created 150,000 down from the 158,000 jobs created in March.  Small businesses accounted for 50,000 of the new positions, however, a slowdown is expected in that sector due to the implementation Obamacare.  Small businesses will want to keep their work forces below 50 employees.

Factory activity at weakest level in six months

Reuters is reporting that manufacturing growth in the US pulled back to its lowest level in six months with the Manufacturing Purchasing Managers Index or PMI slipping to 52.1 in April down from 54.6 in March.  A reading above 50 indicates an economy is expanding while a reading below 50 indicates contraction.  A slow down in orders in April is responsible for the drop.

Housing Market Improving

Home prices are rising at the fastest rate in seven years, with some communities seeing double digit gains, according to the Wall Street Journal.  Prices increased 9.3 percent from a year earlier while mortgage rates remain at record lows.  Nationally, the median home price is $184,300 well below the record of $230,400 in March of 2006.  Home price gains are likely to continue.  Sales of previously owned homes increased by 10.3 percent from a year ago.

China’s Manufacturing dips

China’s official PMI dipped to 50.6 down from 50.9 in March, according to CNBC.  As mentioned above, a reading above 50 indicates an economy is expanding while a reading below 50 means an economy is contracting. Analysts indicate that the real story is the substantial fall in new factory orders, caused by the downturn in Europe.  New orders are also low.  Economists believe that the Chinese government may choose to implement stimulus measures.

World’s Happiest Consumers

According to a survey published on Wednesday by Nielsen, Indonesia’s consumers are the most optimistic in the world.  Indonesia is followed by India, the Philippines, and Thailand.  According to CNBC, Asia-Pacific countries represent seven of the ten most confident countries globally. 

Apple and the world’s largest corporate debt sale

Apple sold bonds worth $17 billion on Tuesday, the world’s larges corporate debt sale.  According to the Financial Times, Apple was raising capital to finance a $100 billion cash return to shareholders.  Demand for the bonds reached $52 billion as investors from around the world sought a piece of Apple’s first debt offering since 1996.  While Apple has $145 billion of cash on its balance sheet, only $45 billion is held in the US and repatriating cash reserves would have serious tax implications