BUSINESS NEWS FEBRUARY 26TH, 2016
PLEASANT SURPRISE ON WALL STREET
Despite fears of a slowing economy, Friday morning saw Wall Street higher than usual, with a reported GDP growth of 1% annually, up from the previous 0.7%. In the third quarter alone, the economy showed a growth of 2%, which was helped along by a 4% jump in crude oil stock. Peter Cardillo, chief marketing economist at First Standard Financial Bank in New York said that there’s a good possibility of closing high this week. On Thursday, the S&P 500 recovered from one of its worst starts to the year, and moved closer to its best 2 week performance since February, closing above 1,951 points. Eight of the ten sections of the index were up, with energy leading the way at growth of 1.4%. Recently, energy also led the downward trend in the S&P.
CONCERNS ABOUT INFLATION AS CONSUMER SPENDING INCREASES
Despite concerns over a weakening economy, consumer spending saw a solid January, rising steadily and bringing inflation up with it by the largest margin in four years. In the face of a stumbling stock market, consumers’ confidence and subsequent spending should stave off fears of an impending recession. A report from the Commerce Department says that consumer spending has increased by 0.5%. Chris Rupkey, chief economist at MUFG Union Bank says that consumers are sending a message that the economy will remain strong.
RUBIO: PUERTO RICO SHOULD NOT DECLARE BANKRUPTCY
The small island country of Puerto Rico is $72 billion in debt. While bankruptcy does seem a logical step, Florida Senator Marco Rubio thinks otherwise. The presidential hopeful says that the only way for Puerto Rico to solve this problem is to “revitalize its economy”. In the Republican debate on Thursday, Rubio argued that it is too hard to do business in Puerto Rico, as the tax rate is too high, leading to an economy that is not growing. Rubio says that Chapter 9 bankruptcy is a last resort, one that would only come after tax cuts and budget regulations.
TOP STOCK OF 2016
The stock market has had a tumultuous year, but there still has to be a top stock. This year saw MIchael Kors top Wall Street. The secret to the fashion company’s success? Diversification. Michael Kors has not limited itself to purses. They now have sunglasses, watches, and shoes to their name. While every stock is in the red, Kors is up a stunning 43%, rejecting Wall Street expectations. Michael Kors understands that fashion is about creating a lifestyle. Their women’s handbags are #1 in sales in the United States. Even more impressive is their international and online growth.