Morning Business Memo:
Investors and members of Congress will be listening closely today to what Fed Chairman Ben Bernanke has to say about the US economy as he testifies to the Joint Economic Committee. Will the Fed take fresh action to juice up the recovery? Does it really have any ammunition left? Some Fed watchers say the most recent round of purchases of government debt had little impact on long term interest rates. The yield on 10-year notes has indeed fallen to as low as 1.5 percent, but that appears to have been the result of investors dumping European securities and not the result of Fed policy. Nonetheless, three voting members of the Federal Reserve’s policy committee are hinting they would support further action if the economy weakens. Vice Chairwoman Janet Yellen says the Fed could pursue more bond buying to lower long-term interest rates and encourage borrowing and lending
The stock market had its best one day gain of the year yesterday. The Dow Jones index rose almost 287 points – up nearly 2.4 percent. This followed rumors and reports from Europe that more aggressive action is being considered to limit the fallout from the debt crisis. Stock futures rose this morning after China cut lending and deposit rates by 1/4 percent in a bid to reverse the recent economic slowdown.
Spain’s Treasury successfully raised $2.62 billion from bond markets, but at higher interest rates as investors remain concerned Spain’s banks may need another bailout.
Nowhere is the pain of the debt mess being felt more severely than in Greece. Unemployment surged to nearly 22 percent in March, from 15.7 percent in Greece during the same month last year.
The world’s top two smart phone manufacturers fight it out in courts around the world. Samsung Electronics says it will vigorously oppose Apple’s move to block sales this month of the Galaxy S III smartphone in the U.S. Samsung’s statement comes after Apple asked a U.S. district court to ban sales of the S III in the U.S., claiming Samsung violated Apple’s patents. Samsung said it will demonstrate to the court that the S III is innovative and distinctive. Both companies have been battling each other over mobile patents in North America, Europe and Asia for over a year.
Richard Davies Business Correspondent ABC NEWS Radio