Economic Report September 14, 2004

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Economic ReportSeptember 14, 2004

• Lauren Ewald
• Janan Hatem
• Bejan Motamedi

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OIL

• Nations belonging to OPEC are scheduled to meet
  this week
• Considering raising its official oil-output
  target
• Countries claiming that they have excess supplies
  already, but have no takers because it contains
  sulfur
• OPEC countries blame high prices on speculators
  and terrorism fears, not limited supply

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OIL continued

• In Russia, Yukos continues to have political
  troubles
• Authorities are threatening to revoke its
  licenses to produce oil, a decision expected to
  be complete in two weeks
• As much as 200,000 barrels a day could be lost

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Economic Forecast Downgraded

• In a recent survey by the Wall Street Journal,
  participating economists slightly downgraded
  their initial projections on economic growth
• Economists attributed their move to
  disappointing numbers in consumer spending as
  well as high oil prices

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Downgraded Figures
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Upcoming News

• Later this week, the following reports will be
  released
• Federal Budget Deficit (Aug)
• Retail and Food Services Sales (Aug, excluding
  autos)
• Current Account Deficit (2nd Qtr 04)
• Business Inventories (July)
• Industrial Production (Aug)
• CPI
• Business Outlook Survey (Sept)
• Michigan Sentiment Index (Sept)

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In Other News

• US Airways filed for bankruptcy for the second
  time, adding more trouble for the struggling
  airline industry
• Some significant companies are reporting that 3rd
  quarter earnings will fall short of estimates
  INTEL, Coca-Cola, and Texas Instruments are among
  them
• WTO gave permission for several countries to
  charge the US additional taxes in response to
  Washingtons refusal to repeal antidumping laws
• The Byrd Amendment allows antidumping tariffs
  collected by the U.S. government to be shared
  with domestic industries to help offset alleged
  damage from less costly imports
• Could result in 300 million in additional taxes

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Summary

• Oil prices continue to remain high, and are
  taking a toll on consumer spending and economic
  forecasts
• Many companies reported that they were overly
  optimistic about 3rd quarter earnings and cut
  their estimates
• More information will be released later this week