bussiness market watch

That's because the critical transition China is going through will affect our businesses and our livelihoods.

As I laid out in my last two columns, China is trying to move from being an export-oriented manufacturer to boosting domestic consumption, developing the country's interior, and becoming a more technologically advanced, high-value-added economy.

That will inevitably spur more conflicts with the U.S., Europe, and Japan about currency and trade issues and intellectual property. Some companies are seriously reevaluating their investments in China, which once looked like the Promised Land.

And American businesses and workers shouldn't expect much relief in the competitive pressures China is putting on prices and wages. China's transition is bound to be gradual, and in the meantime it needs to keep revving up its export machine to spur growth.

"I see the next 10 years as more driven by friction as the Chinese compete with the Europeans, Japanese, and Americans," says Christopher McNally, fellow of the East-West Center and an expert on China. Online Marketing Services Provider.

Friction indeed, epitomized by the recent rant by Jeffrey Immelt, chief executive officer of General Electric /quotes/comstock/13*!ge/quotes/nls/ge (GE 16.12, -0.03, -0.19%) , at a private dinner in Rome, according to the Financial Times. Read FT story about Immelt's outburst.

Immelt, of course, tried to walk that quote back, but he's not the only one complaining. We all know about Google Inc.'s /quotes/comstock/15*!goog/quotes/nls/goog (GOOG 484.85, -0.14, -0.03%) travails in China, and Microsoft Corp.'s /quotes/comstock/15*!msft/quotes/nls/msft (MSFT 25.81, -0.22, -0.85%) constant kvetching about software piracy there over the years.

Even the stodgy Germans are objecting -- and they're among the most successful exporters to China.

"Two of Germany's leading industrialists -- Jürgen Hambrecht, chairman of chemical giant BASF SE and Peter Löscher, chief executive of conglomerate Siemens AG /quotes/comstock/13*!si/quotes/nls/si (SI 97.39, +0.45, +0.46%) -- raised complaints about a range of Chinese policies toward foreign business during a public meeting with Chinese Premier Wen Jiabao and visiting German Chancellor Angela Merkel," The Wall Street Journal reported.

"The concerns center on policies that foreign executives feel put them at a disadvantage against increasingly potent Chinese competitors, or compel them to transfer valuable technology to China," the Journal reported. Direct Marketing Services Provider.

One Japanese consortium led by Kawasaki Heavy Industries learned that lesson the hard way when it joined a Chinese company, Sifang, to manufacture "bullet trains," for which the Japanese are world-renowned.

But by two years into the six-year deal, "Sifang had 'digested' all the technology required for their manufacture," the FT reported.

Result: China had its bullet trains, and Sifang, not the Japanese companies that originally provided the technology, will likely reap the rewards of supplying China's rapidly growing high-speed rail network -- and those of other countries, too.

So, thank you very much. Now, go home.

Don't get me wrong: I'm not trying to demonize China, which is acting thoroughly in its own self-interest. Along with honest innovation, theft of ideas is just part of capitalism. Media Marketing Agency.

July's consumer confidence index fell to 50.4 -- the lowest level since February -- from an upwardly revised 54.3 in June.

"Concerns about business conditions and the labor market are casting a dark cloud over consumers that is not likely to lift until the job market improves," said Lynn Franco, director of the Conference Board's consumer research center, in a statement.

"Given consumers' heightened level of anxiety, along with their pessimistic income outlook and lackluster job growth, retailers are very likely to face a challenging back-to-school season."

July's confidence reading should be closer to 90 than 50, given how long the economy has been recovering, Dan Greenhaus, chief economic strategist with Miller Tabak, wrote in a research note. Online Marketing Services Provider.

"While July provides some measure of stability for this index following the exceptionally large drop in June, by any measure, consumer confidence remains extraordinarily depressed in comparison to previous readings," Greenhaus wrote.

Consumers' view of current conditions fell in July, as did their short-term outlook. Direct Marketing Services Provider.

The present-situation index fell to 26.1 in July, the lowest level since March, from 26.8 in June. Those saying present business conditions are "bad" rose to 43.6% in July from 41% in June, while those saying jobs are "hard to get" rose to 45.8% from 43.5%.

The expectations index fell to 66.6 in July, hitting the lowest level since February, from 72.7 in June. Those expecting business conditions in six months to be "worse" rose to 15.7% in July from 13.9% in June, while those expecting more jobs fell to 14.3% from 16.2%, and those expected a decrease of income rose to 17.5% from 16.8%.

Buying plans have been affected, according to the Conference Board. Those with plans to buy a home within six months fell to 1.9% in July from 2% in June. However, those with plans to buy an automobile rose to 4.5% from 4.1%, and those planning to buy major appliances rose to 28.5% from 23.7%.

Earlier this month the government reported that nonfarm payrolls fell 125,000 in June, with weak private-sector hiring. Media Marketing Agency.

It’s long been said that when the U.S. economy sneezes, Canada’s catches a cold. But these days, given recent upbeat economic news, more and more Canada watchers are saying, “What cold?”

Last week’s report that Canada’s resurgent economy created 10,000 more jobs — 93,000 in all — than its southern neighbors has focused a lot of U.S. media attention to just what’s going on in the Canadian economy.

MarketWatch’s Nick Godt, in his piece this week, noted that Canada’s “boring” regulated economy is working better than ours: “In Canada, ” he wrote, “where a regulated banking system and strong consumer protection laws helped the country weather the globe’s worst financial and economic crisis since the Great Depression, a vibrant private sector is hiring again.” He also noted that in Canada, “big money and business interests don’t have as much sway over policies as in the U.S.” Online Marketing Services Provider.

There’s been strong hiring in the service sector in Canada, and the left-leaning Huffington Post took note of this in a recent piece headlined, “Need a job? Try Canada, where hiring is booming and home prices are rising.”

“In terms of sheer job creation,” the HuffPo piece said, “June saw Canada create jobs at five times the rate predicted by economists.”

And now you can add Moody’s to the list of those who think Canada’s economic recovery is ongoing, even if the U.S. economy falls back into recession. Jimmy Jean, an economist at Moodys.com, says Canada’s economic recovery is safe, even if the U.S. suffers a double-dip recession.

“It is often thought that when the U.S. sneezes, Canada catches a cold,” he said in his report, “but with the shift toward a service-oriented economy over the last three decades, Canada has grown more immune to U.S. woes.” Direct Marketing Services Provider.

Jean added: “The last two U.S. recessions are solid proof that Canada is now better able to withstand strong headwinds from the south. Not that they’ve decoupled altogether, but should a downside mild double-dip U.S. recession materialize, Canada’s recovery would very likely survive.”

In addition to Canada’s strong commodity sector, Jean said the success of Canada’s recovery is also because of policy makers acting quickly in the depth of the crisis, consumers shrugging off the recession and beginning to spend again, and Canadian employers believing in the recovery and hiring again.

Godt’s MarketWatch piece underlined this upbeat trend in Canada’s economy: “While Canada joined in the necessary global move to boost monetary and government spending to rescue the system over the past two years, its private sector is now able to take over the baton from the government.”

Godt also blasted the U.S. Senate’s refusal to extend unemployment benefits thusly:

“Isn’t blocking unemployment benefits for 2 million Americans a pretty good attempt to make sure consumer spending will drop, lead to less growth, and further job losses just in time for the midterm elections?” Media Marketing Agency.

It is inconceivable to this long-time Canada watcher that Canadian politicians — of whatever party — would ever refuse to extend these benefits to the unemployed. Many of my Canadian friends are shaking their heads in disbelief at the cynicism of U.S. Senators who voted against it.

Steinbrenner died in a Tampa, Fla., hospital after suffering a heart attack.His legacy will always be complicated. Since Steinbrenner famously purchased the New York Yankees from CBS /quotes/comstock/13*!cbs/quotes/ for less than $10 million in 1973, the team has won seven World Series titles, far more than any other major-league team in that period. But Steinbrenner was twice suspended along the way for misconduct.

The Boss, as he was known in the city's tabloids, earned a reputation as The Boss from Hell because of his bullying management style. His image as an überdemanding and bombastic executive was immortalized by Larry David's hilarious but eerily pitch-perfect send-up of the "Big Stein" on the "Seinfeld" show.

To his friends and family members, Steinbrenner will also be remembered as generous and philanthropic.

"He was an incredible and charitable man," the Steinbrenner family said in a statement. "He was a visionary and a giant in the world of sports. He took a great but struggling franchise and turned it into a champion again." Online Marketing Services Provider.

Decades of influence

Steinbrenner's impact in his nearly four decades of prominence as a sports owner will endure in three ways, above all:

• By signing such stars as Catfish Hunter, Reggie Jackson and Rich Gossage in the 1970s, he led the way for the gargantuan salaries that are being paid to free-agent athletes today. The modern-day Yankees have the largest payroll in the sport.

• Based on a need to see his own name splashed in headlines, he pioneered the concept of an owner who is as much a star as the players are. Celebrity owners such as Jerry Jones, Mark Cuban and now Mikhail Prokhorov can regard Steinbrenner as the one who gave their executive posts their considerable glitz and glamour.

• By making the Yankees the most successful and newsy sports franchise since the 1970s, Steinbrenner enlivened life in New York City and became the city's most towering sports figure of the past 40 years. He will always be synonymous with the Yankees.
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• Pizzazz

• Steinbrenner took over a Yankee franchise that was moribund, at a time when baseball had been losing ground fast to professional football. Steinbrenner gave the sport a great deal of pizzazz by spending millions of dollars on his players, feuding often with managers -- notably Billy Martin -- in the media and demanding top-flight performances from his players in every game. Media Marketing Agency.
  

It's a fair question to ask about a country whose debt is nearly twice the size of its economy, particularly in light of this week's political developments. On Sunday, the ruling Democratic Party of Japan-led coalition government lost its majority in the upper house.

This was a setback for Prime Minister Naoto Kan, who is known as an advocate of fiscal reform. That should be a clear negative for the yen, as political gridlock makes fiscal-reform progress less likely. Indeed, the yen weakened against the dollar and euro a tad on Monday, but the move was relatively small.

The setback was real, but fiscal reform is far from dead here. A small reform-minded opposition party called Your Party gained 11 seats -- enough to submit legislation to the Diet.

Your Party leader Yoshimi Watanabe gave a series of media interviews Wednesday, in which he called for the Bank of Japan to set a 2% inflation target, said the government and Diet needed to be able to replace the central bank head if needed. He also said the BOJ needed to be mindful of yen strength when making policy. Online Marketing Services Provider.

"Insufficient monetary easing has been the reason why Japan hasn't been successful in getting rid of its deflationary gap, and there is nothing more to say than that," Mr. Watanabe told Dow Jones -- although I have a hunch he has a lot more to say in the weeks ahead.

U.S.-Japanese yield differentials will also tend to favor the yen for a while.

At the conclusion of its regular meeting Thursday, the BOJ is expected to upgrade its real economic growth forecast for the fiscal year which began in April from 1.8% to around 2.5%, according to reports.

But it is also widely expected to keep its main policy interest rate at 0.1%, where it's been since December 2008.

An upcoming change to Japan's margin trading regulations will likely support the yen in the coming weeks. Some analysts estimate margin trading comprises as much as 20% to 30% of yen trading liquidity here on any given day. Direct Marketing Services Provider.

Last year, the Financial Services Agency announced it would set limits on how much foreign-exchange investors can buy on margin, in order to protect "Mrs. Watanabe" - no relation to the Your Party leader. The common surname has become the collective moniker for Japan's retail investors, in a country where housewives are often in charge of family budget and investment decisions.

The plan calls for the leverage cap to be set at 50 times the amount of principle cash committed starting in August, and then further cut to 25 times next year.

The rule change came after a spate of local media reports about some of these housewives losing huge sums, trading on margin hundreds of times the minimum amount they were required to invest up front to open their accounts. Media Marketing Agency.

In a statement, Chief Executive Paul Otellini said "strong demand from corporate customers for our most advanced microprocessors helped Intel achieve the best quarter in the company's 42-year history."

"The PC and server segments are healthy and the demand for leading-edge technology will continue to increase for the foreseeable future," he added.

In a call with analysts, Otellini also painted an upbeat picture of the global economy, saying "the economies of the world continue to reflect renewed economic momentum."

As expected, Intel found strength in a healthier corporate market. "In addition to continuing year-over-year growth in the consumer segments, this quarter we benefited from a broad-based return of the enterprise and small business segments," he said.

The chip giant's main business segment posted strong sales gains.

Revenue for its PC client group, which covers products for desktops, notebooks and netbooks, jumped 31% to $7.8 billion from the year-earlier period. Online Marketing Services Provider.

Sales for the data-center group, which includes products for servers and workstations, soared 42% to $2.1 billion from the year-earlier period.

For the current quarter, the company said it expects revenue of $11.6 billion, plus or minus $400 million. Analysts were expecting the company to post sales of $10.92 billion for the third quarter, according to a consensus survey by Thomson Reuters.

"Numbers are great across the board," Gleacher & Co. analyst Douglas Freedman said, noting that Intel's outlook "looks appropriately conservative, but still well ahead of street expectations."

IDC's Crawford Del Prete agreed the company had a "great quarter" and shows that Intel is "clearly seeing the benefit of a strong PC refresh cycle, mobile strength and product mix."Direct Marketing Services Provider.

"It does not get much better for them," he added. "The bigger question is: Where do they go from here? With so many mixed signals from worldwide markets, will spending continue? We think so, but it could mean a more caution the second half of 2010. ... For sure, Intel's outlook is strong, but the compares get harder."

Wedbush analyst Patrick Wang pointed out the increases were a "work in progress."

"They point to a late second-quarter build for anticipated demand in the third quarter," he said. "We'll see if global demand pulls through for them. Media Marketing Agency.