Last Week’s Headlines
Last Week’s Headlines- Growth in the eurozone was sluggish in the third quarter, slowing to 0.1%; that represents an annual rate of just 0.4%, compared to the second quarter’s annualized 1.2% rate. Powerhouse Germany, which saw 2.9% growth in the second quarter, had less than half that in Q3.
- President Obama said insurance companies that have cancelled existing policies that do not meet the standard of the Affordable Care Act will now be allowed under the act to extend those policies for existing policyholders into 2014. However, state insurance regulators would also have to agree to the extensions. Also, insurers must outline the coverage provisions available under the ACA that are not included in those policies, and notify the policyholders that they may also shop for another policy through an insurance exchange.
- Janet Yellen reassured members of the Senate Banking Committee that if confirmed to replace Ben Bernanke to chair the Federal Reserve Board, she would continue the Fed’s current “data-driven” approach to tapering Fed economic support.
- Cleared for takeoff: The Justice Department agreed to settle an antitrust suit and permit the $17 billion merger of American Airlines and US Airways, which will create the world’s largest airline carrier. The agreement will require a reshuffling of airline service, since the two airlines will have to relinquish some of their gates, primarily at Washington’s Reagan National and New York’s LaGuardia but also at five other airports.
- A Miami-based mutual fund company offered to buy portions of the federal government’s stake in mortgage guarantors Fannie Mae and Freddie Mac. Fairholme Capital Management, which already owns preferred shares in the two companies, said it would lead a consortium of investors interested in the mortgage-guarantee business. The companies, which have been under federal authority since the 2008 financial crisis, have become profitable; after third-quarter earnings, Fannie Mae will have paid the government almost $114 billion (after having gotten $116 billion in financial assistance), while Freddie Mac will have paid the Treasury $9 million more than the $71.3 billion worth of aid it has received.
- The International Energy Agency said that OPEC countries’ role in the global energy market is being diminished by increased production in the United States and Brazil. The IEA forecast that the United States could temporarily surpass Saudi Arabia as the world’s largest producer of natural gas and oil by 2016, though that trend would likely reverse by the middle of the following decade. India and Southeast Asian countries will join China in helping to increase consumption by as much as one-third by 2035.
Eye on the Week Ahead
Data on U.S. manufacturing, housing, and retail sales could suggest whether the Q4 economy got off to a good start, while minutes of the Fed’s most recent monetary policy committee meeting are always of interest.
Key dates and data releases: international capital flows, homebuilders survey (11/18); employment cost index (11/19); consumer inflation, retail sales, home resales, business inventories, Federal Open Market Committee minutes (11/20); wholesale inflation, Philly Fed manufacturing survey, leading economic indicators (11/21).
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Article courtesy of Financial Advisor, Dempster Cherry of Sage Point Financial. To find out more click here