Wednesday, June 26, 2013

Emerging Markets & US Exports


There was no discussion of exports in Bernanke’s assessment of the economy during his press conference last Wednesday. They’ve stopped growing because global economic growth has been depressed by Europe’s recession.

Tightening global credit conditions and weakening commodity prices threaten also to depress emerging economies. How important are they to the US? More so than in the past, but not enough to hurt the US economy much at all. Total exports of goods and services account for 14% of nominal GDP. Merchandise exports to emerging economies account for 67% of total exports currently, up from about 50% in 1990. The good news is that US commodity imports have gotten cheaper.

Today's Morning Briefing: 'Undercurrent of Optimism' (1) Hilsenrath’s question. (2) Optimistic deputy is ready to terminate QE. (3) Fundamentals looking better. (4) Citigroup Economic Surprise Index turning up. (5) Will rising home prices trump rising mortgage rates? (6) Job gains boosting consumer confidence. (7) Capital spending trending higher along with profits. (8) Less fiscal drag from state and local governments. (9) Exports are a drag. (10) EMs matter, but not that much to US. (11) Three Fed tenors singing out of key. (12) Focus on overweight-rated S&P 500 Industrials. (More for subscribers.)

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