The Rest of the World is Weakening Rapidly

The Dow dropped triple digits in early trading this morning was due to The following headlines from around the world, including earning report from US companies and economic reports today. Here are:

1. The Big Automaker, Ford(F), posts $8.7 billion loss on asset write-downs. Ford reported another terrific losses. According to ClusterStock.com News, The company posted a record $8.7 billion loss (down from a $750 million profit a year ago) after consumers continued to shun its oversize product lineup. The company's European and Asian businesses are doing well, but Ford has made a hash of its core US business after making the same mistake it made in the 1970s. Ford's CEO, Alan Mulally, said, "we continue to take decisive action in response to the rapidly changing business environment and remain absolutely committed to the four elements of our business transformation plan. Our European and South American operations are robust and profitable. We have momentum in Asia. And we are uniquely positioned to leverage our global assets and the global strength of the Ford brand to quickly bring more small, fuel-efficient vehicles to North America".
   
   
   In this Sept. 11, 2007 file photo, Ford CEO John Fleming presents the European Ford Focus during the first press day at the International Auto Show (IAA) in Frankfurt, Germany. Ford announced it will build the car in North America and is set to go on sale in the U.S. in 2010. Ford Motor Co. said Thursday, July 24, 2008, it lost $8.67 billion in the second quarter largely because of a reduction in the value of assets. (AP Photo/Bernd Kammerer)
   
   
   
   
2. Existing home sales dropped to 4.86 million in June, down from 4.99 million in May and below the 4.95 million consensus estimate. Year-over-year, the figure is down from 5.75 million, or roughly 15%. Inventories up. The National Association of Realtors reported that sales dropped by 2.6 percent last month to a seasonally adjusted annual rate of 4.86 million units, a 10-year low.
   
   That was more than double the decline that had been expected and left sales 15.5 percent below where they were a year ago. The downward slide in sales depressed prices, too. The median price for a home sold in June dropped to $215,100, down by 6.1 percent from a year ago. That was the fifth largest year-over-year price drop on record. The drop in sales pushed inventories of unsold single-family homes and condominiums to 4.49 million units, up by 0.2 percent. That represented a 11.1 month supply at the June sales pace, the second highest level in the past 24 years.
   
   




3. the Department of Labor released its report on initial jobless claims in the week ended July 19th, showing that jobless claims for the week increased by much more than economists had been anticipating.
   
   The report showed that jobless claims jumped to 406,000 from the previous week's revised figure of 372,000. Economists had been expecting jobless claims to increase to 380,000 from the 366,000 originally reported for the previous week.
   
   With the bigger than expected increase, weekly jobless claims rose to their highest level since a matching 406,000 in the week ended March 29th. Weekly jobless claims have not been higher since September of 2005.
   
   The Labor Department also said that the less volatile four-week moving average rose to 382,500 from the previous week's revised average of 378,000.
   
   At the same time, the report showed that continuing claims in the week ended July 12th edged down to 3.107 million from the preceding week's revised level of 3.116 million.
   
   Nonetheless, the bigger than expected increase in initial jobless claims is likely to add to recent concerns about the strength of the labor market.
   
   The Labor Department also said that the unemployment rate held steady at a nearly four-year high of 5.5 percent. Economists had been expecting the unemployment rate to edge down to 5.4 percent after surging up 0.5 percentage points in May.
   
   The 0.5 percentage point increase in the unemployment rate in May marked the biggest one-month increase since February of 1986 and lifted the unemployment rate to its highest level since October of 2004. (RTTNews)
   
   
4. The Eurozone composite output index in July eased at the fastest pace since November 2001, signaling a contraction in private sector output, a survey carried out by the Royal Bank of Scotland and Markit Economics showed. The RBS/Markit Flash Eurozone Composite Output Index stood at 47.8 in July, down from 49.3 reported in June. Economists had expected a level of 49 for the month of June. The indicator suggested a contraction in private sector output for the second consecutive month in July. A reading below 50 indicates contraction in the private sector.
   
   The Purchasing Managers' Index for manufacturing as well as service sectors reached the lowest level since June 2003. The manufacturing PMI in July declined to 47.5 from 49.2 in June, while services PMI stood at 48.3, smaller than the 49.1 in June. Economists were expecting PMI readings of 48.7 for manufacturing and 48.8 for services.
   
   The Markit Flash Germany Composite Output Index, reached a six month low of 52.2 in July. The manufacturing PMI dropped to 50.9 from June's 52.6 and the services PMI eased to 53.3.
   
   According to Markit/CDAF report, the Flash French composite output index slid to 47 in July, 80-month low. The services PMI reached the series low of 47, while manufacturing PMI fell to 47.3, a 5-year low. (RTTNews)
   
   
5. French business confidence fell to the lowest in more than three years in July as record oil prices and a stronger euro dimmed the outlook for economic growth. An index of sentiment among 4,000 manufacturers dropped to 98 from 101 in June, according to Insee, the Paris-based national statistics office. That was the weakest since May 2005. Economists expected a reading of 100, according to the median of 22 estimates in a Bloomberg News survey.
   
   
6. German business confidence plunged the most since the Sept. 11 terrorist attacks and European manufacturing and services shrank, increasing the risk of a recession across the euro region. The Ifo institute's German business confidence index dropped 3.7 points from a month earlier to 97.5 in July. That was more than three times the decline forecast by economists in a Bloomberg News survey and the overall reading was the lowest in three years. Manufacturing and services across the euro area contracted for a second month and in the U.K., retail sales dropped by the most since at least 1986.
   
   
7. Italian business confidence fell to its lowest in seven years in July as rising oil costs and a stronger euro hurt prospects for economic growth. The Isae Institute's business confidence index dropped to 83.5 from a revised 86.7 in June the Rome-based research center said today. That's the lowest since October 2001 and less than the median forecast of 86.5 in a Bloomberg survey of 17 economists. Manufacturers' costs are rising as companies struggle with the euro's 13 percent appreciation against the dollar in the past year and near-record oil prices. Prime Minister Silvio Berlusconi, who took office less than three months ago, has lowered taxes on overtime pay to try to help businesses cope with slowing growth.
   
   
8. U.K. retail sales dropped in June by the most since at least 1986 as accelerating inflation and the slowdown in economic growth prompted consumers to cut spending. Sales fell 3.9 percent after rising 3.6 percent in May, which was the biggest increase since the data series began more than two decades ago, the Office for National Statistics said today in London. Economists forecast a 2.6 percent drop, the median of 30 estimates in a Bloomberg News survey showed. Bank of England policy makers cited weaker retail sales surveys as a signal of slowing economic growth at their decision this month, minutes released yesterday show. Falling house prices and a jump in credit costs have squeezed consumers just as the fastest inflation in at least a decade prevents the central bank from cutting the main interest rate from the current 5 percent.
   
   
9. Unemployment in Spain, the source of half the euro region's new jobs between 2001 and 2006, rose to the highest rate in 3 1/2 years in the second quarter as home- building collapsed.The unemployment rate advanced to 10.4 percent from 9.6 percent in the first quarter, the Madrid-based National Statistics Office said on its Web site. That compared with the 10 percent median estimate in a Bloomberg News survey of eight economists. The number of jobs increased 0.1 percent to 20.4 million, compared with a 0.4 percent decline in the first three months.
   
   
10. The Ministry of Finance said in a statement that Japan's merchandise trade surplus plunged 88.9% year-on-year to JPY138.6 billion in June. Trade surplus fell for the fourth consecutive month. Exports eased 1.7% to JPY7.16 trillion, marking the first decline in four and a half years on slower demand, while imports increased 16.2% to JPY7.02 trillion.
    
    Elsewhere, the Bank of Japan board member Atsushi Mizuno said that the central bank need to hold interest rates for the time being considering weak domestic demand, slowing economic growth and higher commodity prices. The policymaker added that he expects core inflation to rise about 2.5% by autumn. (RTTNews)
    
    
11. The Monetary Authority of Singapore managing director Heng Swee Keat said in his opening remarks at MAS' Annual Report 2007/2008 press conference that the central bank is revising its CPI inflation forecast for the current year to 6%-7% from an earlier estimate of 5%-6%. With regard to economic growth, Heng said the MAS is firm on its previous forecast, adding that "Our assessment for full-year GDP growth remains at 4%-6%. (RTTNews)
    
    
12. In Malaysia, the National SME Development Council said in its annual report 2007 that inflation is expected to rise further in 2008 to average in the range of 4%-5%. With regard to economic growth, the development council noted that economic expansion would continue despite a potentially more difficult environment with slower global economic growth and uncertainties in the international financial markets. (RTTNews)
    
    
13. In India, government data showed that inflation based on the wholesale price index decreased to 11.89% for the week ended July 12 from 11.91% recorded in the previous week. Economists had expected the rate of inflation to accelerate further to 12.03%. A year ago, the corresponding rate was 4.76%. (RTTNews)

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