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U.S. Leading Indicators Rise in Sign Growth May Pick Up by End of the Year

By Bob Willis - Jun 17, 2011 11:52 PM GMT+0800

Manufacturing and the rest of the economy may benefit from cheaper fuel prices and the easing of supply bottlenecks stemming from the earthquake in Japan. Photographer: Tom Strickland/Bloomberg

BofA's Meyer on U.S. Economy, Consumer Sentiment

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June 17 (Bloomberg) -- Michelle Meyer, a senior economist at Bank of America Merrill Lynch, talks about the U.S. economy and consumer sentiment. She talks with Mark Crumpton on Bloomberg Television's " Bottom Line." (Source: Bloomberg)

The index of U.S. leading indicators rose more than forecast in May after declining for the first time in almost a year, a sign economic growth may pick up by the end of 2011.

The Conference Board’s gauge of the outlook for the next three to six months rose 0.8 percent after a revised 0.4 percent drop in April, the New York-based research group said today. Another report showed consumer sentiment dropped more than forecast in June.

Declining fuel costs and an easing of supply bottlenecks stemming from the earthquake in Japan may help strengthen consumer spending and manufacturing in the third quarter. The reports bear out Federal Reserve forecasts that the slowdown in growth will prove temporary as commodity prices retreat.

“The outlook is better for the second half,” said Maury Harris, chief economist at UBS Securities LLC in New York. “We’re getting relief from gas prices, and you’re also going to see auto output go back up again as we get a renewed inflow of auto parts from Japan.”

Stocks rose, spurred by signs of progress on a bailout for Greece and the gain in the leading index. The Standard & Poor’s 500 Index rose 0.7 percent to 1,276.17 at 11:51 a.m. in New York. Treasury securities were little changed.

Economists forecast the leading index would rise 0.3 percent, according to the median of 51 estimates in a Bloomberg News survey. Projections ranged from a decline of 0.4 percent to an increase of 0.7 percent.

Broad-Based Gain

Eight of the 10 components of the leading index contributed to the gain, led by the positive spread between short-and long- term interest rates, an increase in consumer expectations and a jump in building permits. A decline in supplier deliveries held back the advance.

Consumers’ outlook may not contribute this month. The Thomson Reuters/University of Michigan preliminary index of consumer sentiment decreased to 71.8 from 74.3 in May, the group said today. Economists forecast a reading of 74, according to the median estimate in a Bloomberg survey.

Consumer expectations for six months from now dropped to 66.8 from 69.5, the report showed. The decrease echoed the change in the Bloomberg gauge of consumers’ outlook released yesterday, which fell to the lowest level since March 2009. That report showed the outlook deteriorated most among households making from $15,000 to $40,000 a year and among older Americans.

The Michigan survey’s current conditions gauge decreased to 79.6, the lowest since October, from 81.9 the prior month.

Job Concerns

“Things have cooled off after better growth earlier in the year, and people are still worried about the labor market, housing and high gasoline prices,” said Scott Brown, chief economist at Raymond James & Associates Inc. in St. Petersburg, Florida, who forecast the headline sentiment gauge would drop to 72. “If we get another break in gasoline prices, that will be very helpful for the consumer.”

That help may already be on the way. After reaching an almost three-year high of $3.99 a gallon on May 4, the average price of regular gasoline at the pump dropped to $3.68 yesterday, according to data from AAA, the largest auto group in the U.S.

Fed Chairman Ben S. Bernanke’s last week predicted the economy will pick up in the second half of the year as energy prices moderate and factory disruptions ease as suppliers of parts from Japan recover. At the same time, he said the central bank should maintain record stimulus to bolster a “frustratingly slow” recovery. Officials are scheduled to meet in Washington on June 21-22 to determine the course of policy.

Supply Disruptions

Supply-chain disruptions from Japan’s earthquake and tsunami in March are being resolved.

Honda Motor Co., Japan’s third-largest carmaker, said its North American vehicle production will return to normal in August for all models except Civics as parts suppliers recover.

“The light at the end of the tunnel is glowing brighter for us, represented by this significant improvement in our production situation,” John Mendel, executive vice president of U.S. sales, said in a statement May 26.

Another report today showed why consumers remained concerned about jobs. Payrolls dropped in 27 states in May, indicating the weakening in employment was broad-based. California led the nation with a 29,200 decrease followed by New York with 24,700 fewer jobs, figures from the Labor Department showed. The jobless rate fell in 24 states and rose in 13.

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13-Jun-2011 21:46

Straits Times Index / STI to cross 3000 boosted by long-term investors

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seem like Dow look ok tonight

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05-Jun-2011 16:09

Straits Times Index / STI to cross 3000 boosted by long-term investors

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The bull is still there, but need some lighting direction b4 it appear again. Meantime, yes it is a roller coaster ride. Ride with your helmet on...........Ahhhhrrrrr

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05-Jun-2011 16:07

Entertainment / Warrenbegger real look!!!

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hehe that look satan....hehe

warrenbegger ( Date: 05-Jun-2011 15:58) Posted:

World Peace

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05-Jun-2011 16:05

Straits Times Index / STI to cross 3000 boosted by long-term investors

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We divide stock market cycles into 3 phases, first-leg bull market, mid-cycle expansion, and bear phase.

First leg: U will sees earnings rebound faster than price and thus P/E compresses, as investors disbelieve earnings durability.

The second phase, or mid-cycle expansion, is when economic and earnings growth moderates but solidifies, thus investors are willing to pay more for perceived sustainability, thus P/E bottoms out and expands. The mid-cycle phase ends when earnings growth accelerates but tops out, and I doubt we are anyway near there at all.

So we are still not near to bear phrase......

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05-Jun-2011 15:52

Straits Times Index / STI to cross 3000 boosted by long-term investors

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Ask yourself why should there be QE3 when they is still excess reserve in the bank? N printing of more money will only push up inflation in US? Emm think logically n u will get the answer.

Euro issue is a roller coaster. Debts here n there. But they will be solved with known case in Greeze, Spain,etc. Problem will only blow BIG when they caught un-noticed.

China showing sign of slow down, probably due to yuen appreciation. Yuen appreciation may help contain inflation in China. But it deter investor to go to China to invest, as the cost of investment there increased. Thus cause the downturn in growth in China. Besides China banking now also come up with lots of regulation as well.....i thk is to contain property burst. As the property price there is at high. N it caused the property company in China to face strong competition to maintain their profit/ revenue. For china case, I'm not sure if i'm right to put it in this way. Correct me if you feel im wrong on it.

But i fell all this should brighten up around July/ Aug onwards. Now currently we will only see a directional STI.

wishbone ( Date: 05-Jun-2011 15:34) Posted:

With QE2 coming to the end and no sight of any QE3 and couple by the issues still not solve in EU and China showing sign of slowing down growth, the future doesn't look that bright unless otherwise some crazy things surface to excite the market.

Hold on tight tight and ride the roller coaster.

Smiley

dealer0168 ( Date: 04-Jun-2011 16:31) Posted:

Statement below badly input. See this one:

The main reason driving short term weakness, we believe, is that QE2 is coming to an end this June. Most market participants are firmly of the view that QE2 is responsible for the renewed burst in economic recovery, on that view, we only agree to a very limited extent. Off the bat, we acknowledge it has done wonders for “animal spirits”, bonds were sold in favour of risk assets, causing yields to rise (i.e. higher interest rates, but how can that be good for the economy at this stage? yet US growth in 4q10 was robust). On actual fact, QE2’s influence on real activity was greatly exaggerated, as the money printed was not loaned out for economic activity, but is still sitting in the banks as evidenced by excess reserves

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05-Jun-2011 15:35

Entertainment / Warrenbegger real look!!!

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QE, Quantitative easing is a monetary policy tool used by some central banks to stimulate their national economies when conventional monetary policy has become ineffective. The central bank creates money by buying government bonds and other financial assets, in order to increase the money supply and the excess reserves of the banking system

tanglinboy ( Date: 05-Jun-2011 15:15) Posted:

What is QE?

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05-Jun-2011 14:27

Neptune Orient L Rg / NOL

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oic... anyway our bro in this forum talk abt $3 pay by temasek b4. Thus interested to know when did they do so....

SupremeA ( Date: 05-Jun-2011 14:02) Posted:

Lol. I wasn't trying to answer you. As for Temasek, I have no idea.

dealer0168 ( Date: 05-Jun-2011 09:27) Posted:

see what question i am asking.....haha....

wo jiang tong ni meng jiang xi.....

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05-Jun-2011 14:25

Healthway Med / healthway, healthy?

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although not in sing. But sing doctor are told to be on standby for such thing outbreak.

Refer to the news below for the vegets that involved in the spreading also.

N remember the SAR outbreak bring the clinic $$.

Anyway the opering of the Jap clinic may be one possible driving force also. Cheers.

yummygd ( Date: 05-Jun-2011 12:34) Posted:

i dunno u think this E coli thing will help healthway?Its not in sing (I HOPE)

Anyway i think its e fact that their japanese clinic is opened

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05-Jun-2011 09:50

Healthway Med / healthway, healthy?

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Water, Dialysis Only Treatments for Deadliest European E. Coli Outbreak

By Tom Randall and Naomi Kresge - Jun 4, 2011 9:26 PM GMT+0

Doctors treating the world’s deadliest E. coli outbreak have little beyond water and dialysis machines to help them clear the contagion from patients, according to infectious disease specialists.

The new strain of E. coli, which has killed at least 18 people in Europe, produces a poisonous by-product called shiga toxin that damages the kidneys of some patients and requires the use of dialysis to scrub the blood clean. Some patients need transfusions after the bacteria dissolves their red blood cells, said Robert Tauxe, deputy director of food-borne illness at the U.S. Centers for Disease Control and Prevention.

Germany alone has reported 520 cases of the kidney ailment. Overall, 1,833 cases of E. coli infection have been confirmed, the European Centre for Disease Prevention and Control said today. In less severe cases, doctors use fluids to maintain hydration and stream the diarrhea-causing toxins through the body. Antibiotics don’t help, and can worsen the illness.

“It’s clearly a more severe disease than is normally seen because of this kidney failure association,” said Stephen Calderwood, chief of the infectious disease division at Massachusetts General Hospital in Boston. “There is some data that if you keep the patient hydrated it may lessen the kidney disease. What is recommended is supportive treatment -- no antibiotics but maintain hydration.”

No Antibiotics

Antibiotics can’t be used because they increase the release of toxins into the bloodstream, compounding kidney damage, Calderwood said. The one class of antibiotics that doesn’t do this, known as carbapenems, is unlikely to help with E. coli, though they may be useful for patients who are simultaneously fighting additional infections, he said.

Authorities are investigating a restaurant in Luebeck, Germany, as a possible source of cases in the outbreak, Luebecker Nachrichten reported today. Seventeen people fell ill in mid-May after eating at the restaurant in the northern coastal city, the newspaper said, without saying where it got the information. Investigators from the Robert Koch Institute and the Federal Institute for Risk Assessment arrived in Luebeck yesterday, the newspaper said.

Spokespeople at the Berlin-based Robert Koch Institute couldn’t be reached for comment today.

Similar Symptoms

The new E. coli strain, previously identified in isolated cases but never linked to an outbreak, begins with symptoms similar to more common types of the bacteria. Diarrhea starts anywhere from two to seven days after eating tainted foods, though most cases occur in the three- to four-day range.

The diarrhea often contains blood and can be accompanied by fever, abdominal cramps and vomiting, Claudia Stein, director of health information, evidence and research at the World Health Organization in Geneva, said in a telephone interview.

“It makes your guts bleed the bloody diarrhea is really a hallmark,” Stein said. “Somebody with bloody diarrhea should not wait. Go straight to their medical practitioner and report this, and then they have to be hospitalized.”

At the hospital, patients will be given fluids to begin the cleansing process, intravenously if necessary, she said.

Usually Harmless

All humans carry E. coli in their intestines, and those strains are usually harmless, according to the Stockholm-based European Centre for Disease Prevention and Control. Some variants cling to the walls of the intestine and produce toxins that cause illnesses ranging from diarrhea and nausea to the potentially fatal kidney complication, known as hemolytic uremic syndrome, or HUS.

In addition to the 520 German cases of the kidney illness linked to the spread of E-coli, another 31 have been reported in Sweden, Spain, Denmark, the U.K., the Netherlands and Poland, the European disease agency said today. Seventeen people in Germany and one in Sweden have died, the agency said.

By comparison, the biggest outbreak in the U.S. of a toxin- producing E. coli killed four children, gave 41 people HUS and sickened about 700. That event, linked to a different strain, occurred as the result of tainted meat served at the Jack in the Box Inc. fast-food chain in 1993.

When patients develop kidney damage from E. coli, it typically begins 5 to 10 days after the initial symptoms. In some cases, the diarrhea subsides before signs of kidney damage appear. That’s because it takes days for the toxin to be transported through the blood to the kidney and damage kidney cells, Calderwood said.

Kidney Damage

In the European outbreak, the kidney damage appears to be starting sooner than in previous outbreaks, he said. It may be that the strain can shed the toxins into the blood stream more quickly or more completely than in previous outbreaks, though more research is needed, he said.

Patients with kidney failure must be treated for weeks using dialysis machines, said Michael Osterholm, director of the Center for Infectious Disease Research and Policy at the University of Minnesota.

“The number of critical-care beds that are available for people are limited,” Osterholm said. “If this were to grow much larger, there certainly would be a challenge to the health- care delivery system of Germany.”

Most Recover

Most patients recover, though some sustain long-term kidney damage. Children who have recovered from past outbreaks can have long-term complications that include lifelong high blood- pressure, Calderwood said.

The outbreak hasn’t shown definitive signs of slowing, according to the WHO. Researchers are still trying to determine the source of the outbreak.

“The history of outbreak investigations in the U.S. shows that produce outbreaks can be very challenging to isolate the cause,” Caroline Smith DeWaal, director of food safety for the Center for Science in the Public Interest in Washington, said in a telephone interview. “Produce outbreaks can be very, very hard to identify the specific food source.”

People who were sickened ate more salad than healthy individuals, according to two studies of the German outbreak released by the Robert Koch Institute, Germany’s disease control agency. About 95 percent of the patients who became ill had eaten either lettuce, tomatoes or cucumbers, the institute said in an e-mailed statement.

U.S. Produce

The U.S. gets 0.2 percent of its produce from Germany and Spain, because the shelf life of fresh fruits and vegetables is short, said David Elder, the Food and Drug Administration’s director of regional operations, in a conference call with the news media. All produce from Germany and Spain is being checked by inspectors before it’s allowed to enter the U.S., he said.

Bans on imports of EU vegetables would be “disproportionate,” the European Commission said in a statement today. The commission’s Employment, Social Policy, Health and Consumer Affairs Council will discuss consolidating European efforts to address the outbreak at a meeting in Luxembourg on Monday, Commissioner John Dalli said in the statement.

Four cases of E. coli infection in the U.S. have been reported among people returning from trips to Germany, according to the U.S. Centers for Disease Control and Prevention.

E. coli spreads through fecal matter. Vegetables are sometimes infected during production by water tainted by bacteria from farm animals. It spreads human to human when people don’t wash their hands, most frequently in day care and in nursing homes, according to Calderwood.

Range of Ages

Most kidney damage historically has occurred among children, Calderwood said. A previous outbreak in Scotland affected adults, but primarily targeted people older than the age of 65. The Germany outbreak is unique because it’s affecting a broad range of ages of adults, mostly women, he said.

Washing vegetables is helpful to prevent sickness, though it doesn’t eradicate the bacteria, Osterholm said. A speck of microscopic bacterium is sufficient to infect a person, and rinsing vegetables offers inadequate protection, he said.

Cooked vegetables are safe to eat, according to the WHO. Cooked foods should be kept hot before eating and should be stored in a cold refrigerator afterwards.

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05-Jun-2011 09:27

Neptune Orient L Rg / NOL

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see what question i am asking.....haha....

wo jiang tong ni meng jiang xi......

SupremeA ( Date: 04-Jun-2011 22:38) Posted:

I think can get at 1.5

chriscyng ( Date: 04-Jun-2011 21:18) Posted:

wait till it drop to 1.75.. if 1.75 dont hold. go for 1.69.. but 1.70 is a good catch. my view

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05-Jun-2011 09:25

Entertainment / Warrenbegger real look!!!

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QE2 will end around that period.

TradeChancellor ( Date: 05-Jun-2011 02:36) Posted:

QE will stop in june rite?

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