Global Economic Updates

Gold climbed above $1,300 an ounce today for the first time since August as worries over the global economy and hopes of stimulus measures from the ECB fueled safe-haven bids. After shunning gold for two years, investors are returning to the precious metal, boosting prices 4.7% just last week. The IMF and World Bank’s weak global growth outlooks and SNB’s abrupt removal of franc’s euro cap last week are also prompting reasons to move into the commodity.

As widely expected, the Bank of Japan held off on expanding its massive stimulus program today and cut its core consumer inflation forecast for the year beginning in April to 1% from 1.7%. The BOJ unexpectedly expanded monetary stimulus in October last year as soft domestic demand and slumping oil prices slowed consumer inflation. However, oil prices have lost nearly half of their value since then, keeping the central bank under pressure.

“The verdict is clear — middle-class economics works. Expanding opportunity works. And these policies will continue to work as long as politics don’t get in the way,” said President Obama in his State of the Union address last night. As he heads into his final two years in office, Obama called on Congress to impose new taxes and fees on high-income earners and large financial institutions and make community college free. Other topics included foreign policy, healthcare, the Internet and Keystone XL.

Global Stocks
Toyota stayed at the top in global vehicle sales in 2014, taking the auto industry crown for the third year straight, but expects vehicle production and sales to fall by 1% this year as demand stalls in emerging markets. Toyota (NYSE:TM) sold 10.23M vehicles in 2014, but with its less upbeat forecast, the Japanese automaker may hand over the crown this year. Volkswagen (OTCQX:VLKAY) sold 10.14M vehicles in 2014, up 4% from the previous year.

Confirming yesterday’s report, Google (GOOGGOOGL) and Fidelity are investing $1B in rocket/spacecraft upstart SpaceX through a new funding round. With SpaceX stating Google/Fidelity will collectively have a stake that’s “just under 10%,” the round apparently features a $10B valuation. The Information said yesterday that the financing would be used to “support the development of SpaceX satellites that could beam low-cost Internet around the globe to billions who don’t have it.”

Dealing a blow to Qualcomm, Samsung Electronics (OTC:SSNLF) says it will not use the company’s processors for its next version of the Galaxy S, Bloomberg reports. Samsung, the world’s largest smartphone maker, tested a new version of Qualcomm’s (NASDAQ:QCOM) Snapdragon chip, known as the 810, but decided not to use it. The new Galaxy S is expected to debut in the first half of this year.

 

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