CNN Money
– Good but not great: U.S. economy grows 2.3%. It grew 2.3% between April and June compared to the same time a year ago, according to the Commerce Department’s first estimate of gross domestic product, the broadest measure of economic activity. Many experts were predicting a stronger number in the 2.5% to 3% range.
The question coming into Thursday was whether the cold weather and other temporary factors were to blame for economy’s woeful performance between January and March. Or, conversely, if more long-lasting factors, like a strong U.S. dollar — which can hurt trade — and a lack of consumer spending, would hammer the economy for the entire year.
Economic growth is extra important this year because America’s central bank, the Federal Reserve, could raise its key interest rate as early as September for the first time in almost a decade.
– Fears over China’s market crash are overblown. The Shanghai Composite Index lost 30% of its value over a three-week period starting in mid-June. Then, after a modest rebound, it plummeted again this week, posting its largest single-day loss in nearly a decade.
The volatility has caused some considerable hand-wringing in many other economies over fears that China’s woes could spur a global sell-off. That’s not likely to happen. It is highly speculative and the bets placed by the retail investors who play there are unlikely to reflect broader economic and corporate trends (…)
Moreover, companies have relatively little exposure to market fluctuations in China. Only about 5% of private sector fundraising in China comes from the stock market itself; this gives businesses a layer of insulation from market volatility. In other words, China’s stock market does not reflect the country’s economic health in the same way that markets do in other countries.
– Europe’s bailed out economies are booming. Except Greece, of course. Spain was on the brink of collapse three years ago. Now the country is surging ahead. The fourth biggest economy in the eurozone has just reported its eighth successive quarter of growth, and the pace is picking up.
Gross domestic product grew by an annual rate of just over 3% in the second quarter, making it one of the fastest growing developed economies in the world. And it’s not alone. Five countries were bailed out by their European partners during the region’s debt crisis, and of those only Greece is still going backwards.
Here’s a look at how things have changed.
Bloomberg News
– Spanish growth. The economy in Spain grew at the fastest pace in eight years in the second quarter of 2015, according to preliminary data released by the National Statistics Institute in Madrid. Growth rose 1 percent on the previous quarter and 3.1 percent on an annual basis. While the preliminary release did not give a breakdown by component, economists see domestic demand as the strongest driver of the accelerating growth in Spain.
– Shell cuts. Royal Dutch Shell Plc announced plans to cut 6,500 jobs and reduce capital investment by $7 billion today as part of cost-reductions in preparation for what the company called a «prolonged downturn» in oil prices. This is a marked change from Shell’s position in April when it expected oil to return to $90 a barrel in three years, but does align the company with industry-wide investment cut-backs. Shares in the company gained the most in three weeks following the announced cuts.
– Facebook results. Facebook Inc. reported results after the close yesterday, with revenue beating estimates. Monthly users of Facebook’s main social site jumped 13 percent to 1.49 billion with 968 million logging in daily in June. The company said that it plans to keep up its brisk pace of investment. Shares fell 3.4 percent in extending trading in New York.
– China’s last hour question. Shares in China’s Shanghai Composite Index closed down 2.2 percent following a sudden fall in the last hour of trading. Thursday’s collapse was a mirror image of Wednesday’s close when shares surged in the last hour to close 3.4 percent higher.