Europe continues the game of near disaster then a rescue, while this may suit the attention grabbing politicians it is directly eroding the confidence of the corporate world.
A quarterly survey by the Business Roundtable found that 24 percent of CEOs expected to cut jobs in the U.S. over the next six months, more than double the 11 percent who had forecast that in the second quarter. Thirty-six percent expected to add jobs, down from 51 percent in the second quarter.
Persistently high U.S. unemployment, which hovers around 9 percent, is blamed for the nation's prolonged economic sluggishness and is shaping up as a key issue in next year's presidential election.
The number of CEOs who expected their companies' sales to rise over the next six months fell to 65 percent from 87 percent and the number who expect to boost capital spending fell to 32 percent from 61 percent.
Overall, CEOs look for real U.S. gross domestic product to rise 1.8 percent this year, sharply lower than the 2.8 percent growth forecast in March.
Their worry stood in contrast to a report from the Commerce Department that found U.S. GDP rose 1.3 percent in the second quarter, up from a previously reported 1 percent.
Europe again averted disaster in its debt crisis when German lawmakers rallied behind Chancellor Angela Merkel to approve a stronger euro zone bailout fund on Thursday.
But bigger challenges loom for the euro zone now. Financial markets are already anticipating a likely Greek default and demanding more far-reaching measures to prevent the crisis that began in Athens from spreading far beyond Europe and its banks.
The Bundestag (lower house) overwhelmingly approved new powers for the 440-billion-euro EFSF fund to make precautionary loans, help recapitalize banks and buy distressed countries' bonds in the secondary market.
Despite a rebellion by 15 backbench Euroskeptics, Merkel won 315 votes from her own center-right coalition, enough to avoid the humiliation of having to rely on the opposition Social Democrats and Greens to pass the plan.
Shayne Heffernan oversees the management of funds for institutions and high net worth individuals.
Shayne Heffernan holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services. www.livetradingnews.com