Quick Summary

July has been a busy month with markets moving up and down, numerous major announcements from major governments and international organizations, and various large developments in the private sector. Rumors have been swirling around Apple’s long-awaited iPhone 5 and the most recent reports suggest a much thinner phone with an “in-cell’ touchscreen. Meanwhile in the financial sector Goldman Sachs announced a 4.4 billion dollar loss in the derivatives market in the second quarter, but still managed to post a 5 billion dollar project. And in the United States growth remains slow but the manufacturing sector seems poised to make a surprise comeback after years of decline. In Asia export oriented markets may be slowing but internally driven Indonesia has been posting steady growth. Europe still remains the global focus, however, with the Eurozone continuing to teeter on the verge of collapse. Bond rates in Spain and other countries have been swinging up and down, but are now edging towards record highs, signaling the possibility of a full-out crisis.

Tech Highlight

Apple’s Next iPhone will use a next-generation In-Cell Screen to reduce thicknesses and improve image quality.

Apple’s iPhone is going on a diet. Rumors have been confirmed by various supply companies that Apple will be switching to a new “in-cell” touchscreen LCD for the long-awaited next edition of the iPhone. This new in-cell technology will feature sensors integrated directly into the LCD screen instead of relying on a separate sensor layer. This screen with simplify Apple’s supply chain which has previously relied on separate suppliers for the sensor and LCD components, and will also improve image quality on the iPhone. The next generation iPhone is expected to arrive this fall though no official launch date has been set.

Business Highlight

JP Morgan suffers from 4.4 billion dollar losses on Derivatives, though still manages to post second quarter profits of 5 billion.

JP Morgan’s announcement has shocked many regulators and caused brief hiccups on the market. When financial experts Goldman Sach’s began working on the derivatives that would set the standard for the financial derivatives market, derivatives were seen as unique and innovative financial tools to spread risks and reward. In the aftermath of the 2008 Financial Crisis and the continued losses being caused by derivatives many are beginning to question their value and risk.

Highlight From Asia 

Foreign Investments are Booming in Indonesia

Indonesia may be poised as the next hot-spot for investment in Asia. The diverse archipelago country of nearly 240 million people has seen Foreign Direct Investments rise by over 30 percent. Foreign direct investments totaled some USD 5.9 billion in the second quarter and may exceed the 19.3 billion record set in 2011.  In 2011 the economy grew at a solid 6.5 percent, representing the strongest growth since 1996, just before the on-set of the Asian Financial Crisis. Unlike many of its regional neighbors, Indonesia’s economy is internally driven with internal consumption making up 60 percent of the economy and significantly less reliance on imports/exports. With the global economy caught in turmoil, economies like Indonesia could come to be viewed as “safe harbors.”

Highlight From North America

Changing global and domestic circumstances are encouraging American companies to bring manufacturing and other jobs back to the USA.

American Companies are Showing Increased Interest in “Re-shoring,” or bringing back manufacturing and other jobs that were shipped abroad. Motivating factors include; political pressure; decreasing costs in the USA; rising costs in China and other foreign countries; increased shipping costs; and  a desire to relocate manufacturing closer to consumer markets to increase response time to changes in demand. This trend may help the United States alleviate its high-unemployment in the long-run, however will also put increased pressure on Asian nations to develop self-sustaining and innovative economies.

Highlight From Europe

Spanish borrowing Costs are Reaching Dangerous Highs but stabilize after Aggressive Calls For Increased Powers for the European Central Bank.

The European “roller-coaster” crisis continues with bond rates for Spanish, Italian, and other “high-risk” countries proving volatile. Early in the month strong words and action by various European authorities, and the election of pro-Eurozone parties in Greece seemed to stabilize markets. The relief was temporary, however, and just a week again bond rates on Spanish bonds were at record highs. Ewald Nowotny, Austria’s central bank governor, has called for increased powers for the European Union’s Central Bank and so far his calls have been well-received by other European leaders and world markets. Still  with recession spreading through at least size European Union counties, declining demand from E.U. members, and continuing financial risks are creating a major drag on the global economy and the effects are being felt across North America and Asia.