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Tuesday, July 17, 2012

Gross Says US Nearing Recession as Goldman Sachs Cuts Forecast

English: Logo of The Goldman Sachs Group, Inc....
English: Logo of The Goldman Sachs Group, Inc. Category:Goldman Sachs (Photo credit: Wikipedia)
Today, Bill Gross gave an interview to the press that could have a significant effect on the stock trade. Pacific Investment Management Co.'s Bill Gross said the U.S. is approaching a recession as economists at Goldman Sachs Group Inc. (GS) and Deutsche Bank AG lowered their forecasts for growth. Goldman Sachs analysts led by Jan Hatzius cut their estimate for second-quarter gross domestic product growth to 1.1 percent from 1.3 percent, while Deutsche Bank's chief U.S economist, Joseph LaVorgna, reduced his forecast to 1 percent from 1.4 percent. Federal Reserve Bank of Kansas City President Esther George said yesterday the U.S. economy probably won't grow much faster than 2 percent in 2012. The U.S. is "approaching recession when measured by employment, retail sales, investment, and corporate profits," Gross, who runs Pimco's Total Return Fund, the world's largest mutual fund, wrote on Twitter yesterday. The International Monetary Fund said a U.S. rebound is moderating and too much fiscal tightening in the world's biggest economy would pose a risk to global growth. Limited employment gains are taking a toll on consumption as a report yesterday showed retail sales dropped for a third month in June, rekindling speculation Federal Reserve Chairman Ben S. Bernanke will hint at further monetary easing before Congress today. ... Continue to read.
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