US Trade Gap Likely Widened, as Imports Grew
The trade deficit in the US likely widened in September, reflecting increased demand for foreign Crude Oil and automobiles as the economy grew.
The Gap between imports and exports increased to US$31.8B from US$30.7B in August, according to the median of 60 estimates in a Bloomberg News survey ahead of the Commerce Department’s Nov. 13 report.
Labor Department data due out the same day may show the cost of goods from abroad rose in October for a 3rd consecutive month.
Government stimulus has so far cushioned the world’s largest economy from the harm caused by mounting unemployment, enabling increases in consumer and business spending that are drawing in products from overseas.
Exports may also grow as expanding economies in Asia and Europe and a weak dollar drive demand for American goods, giving manufacturing a lift.
A US government report last week showed unemployment in October rose to 10.2% the highest level in 26 yrs. The number of jobs lost since the recession began in December 2007 climbed to 7.3M.
A collapse in World Trade earlier this year brought the US gap down to US$26B in May, its lowest level since November 1999, as imports tanked faster than exports.Hot Topic: US Congress Extends, Expands Housing Tax Credit
The US House of Representatives Thursday approved an extension and expansion of the popular housing tax credit to help supporting the lagging housing market until the economy improves.
The Senate passed the measure on Wednesday; the bill will now go to the White House, where President Obama is expected to sign it.
Builders, who say the tax credit has revived their buyer traffic and sales in a very difficult year, toasted and celebrated.
The tax credit will take the housing market into the critical Spring Y 2010 selling season. To receive the credit, buyers must sign a purchase agreement by April 30, 2010, and close on the home by June 30, 2010.
As was the case with the credit that has been in use for most of Y 2009, the extended credit will provide 1st time home buyers up to US$8,000, depending on the price of the home and their household income.
In addition, the newly approved tax credit also covers people who have lived in their homes for at least 5 yrs; they can claim a credit of up to US$6,500 if they purchase a new home.
Finally, the US Congress raised the income limits on the program, which will now allow singles who make up to US$125,000 and married couples with a household income of US$225,000 to be eligible for the credit.
Hong Kong stocks end 1.63% higher, tracking US market gains
The Hang Seng Index of Hong Kong closed 1.63% higher at 21.829.72 last Friday, tracking overnight gains on the Wall Street following better than expected quarterly results announced by Cisco.
The Hang Seng Index gained 0.35% over the past week. Analysts said resistance was turning strong as the blue chip index moved near the 22,000 mark, adding that the index also managed to hold above the support level of 21,000 recently.
Forty-one of the 42 constituents of the Hang Seng Index turned up gainers. The finance sub index, one of the 4 major stock categories, advanced 1.72%. The properties sector added 1. 92% and the commerce and industry sectors added 1.58%. The utilities sub-index gained 0.37%.
Banking giant HSBC rose 1.6 HK dollars, or 1.88%, at 86.85 HK dollars, alone contributing a rise of57 pts to the Hang Seng Index. China Mobile, the leading mobile carrier on the Chinese mainland, rose 0.75 HK dollars, or 1.03%, to close at 73.9 HK dollars. Smaller rival China Unicom surged 3.26 percent at 10.76 HK dollars. The Industrial and Agricultural Bank of China, the largest commercial lender on the Chinese mainland, rose 1.73% China Construction Bank and the Bank of China gained 1.04% and 1.55%, respectively. China Life rose 2.04% and Ping An advanced 1.35%. PetroChina, the business conglomerate of the Crude Oil industry, advanced 1.65%, and Sinopec, whose business is refining in the main, advanced 1.34%. CNOOC, the offshore Crude Oil producer, gained3.37% at 12.26 HK dollars.
Computer maker Lenovo, with improving results announced earlier, finished unchanged at 4.44 HK dollars after moving to as high as 4. 6 HK dollars during the session.
Cheung Kong, the flagship of Hong Kong's richest man Li Ka- shing, was up 1.67% at 97.35 HK dollars. Sun Hung Kai Properties, the leading residential housing developer in Hong Kong, gained 2.47% to close at 116.3 HK dollars.
HKEx, the sole exchange operator, closed up 1.67%at 140HK dollars.
Note: 7.8 HK dollars = 1 US$