Kraft Food Inc
EIC Analysis
Economy
There are many things that may happen in the world that could affect the stock market as a whole, as well as individual stocks. The stock market reacts well to things such as low inflation, increasing Gross National Product (GNP), and other positive news in the economy. The market does not react well to signs that inflation is on the rise or unemployment rising. Today¡¯s inflation rate is on the rise due to hurricane Katrina and high gas prices. ¡°Consumer prices rose at the fastest pace in more than 25 years last month, spurred by a surge in energy prices to record highs after Hurricane Katrina.¡± Hurricane Katrina has also affected unemployment in the U.S. After the hurricane was said and done it cost the U.S. over 500,000 jobs, and the unemployment rate rose from 4.9% to 5.1%. September was the first month since May 2003 in which U.S. payrolls declined. Payrolls however are expected to start growing again soon. However, on a brighter note, economists say that without hurricane Katrina¡¯s effects, the number of jobs would have been increased by about 200,000 in September, which is the monthly average this year. Consumer confidence fell to a two year low as well when it fell from 87.5 in September to 85 in October, the lowest it has been since October 2003. While this may be a large decrease, some economists say that it may not matter much because people seem to be borrowing and spending more money no matter how little confidence they have in the economy. The industrial production (based on output from U.S factories, mines and utilities) of the U.S. has fallen drastically as well after hurricane Katrina. The fall was quite substantial at 1.3%, to the lowest it has been since January of 1982. This drop was because of a decline in oil and gas output after hurricane Katrina.
While industrial production is down, manufacturing has increased substantially with the highest rating in over a year. One reason for this may be
Economy
There are many things that may happen in the world that could affect the stock market as a whole, as well as individual stocks. The stock market reacts well to things such as low inflation, increasing Gross National Product (GNP), and other positive news in the economy. The market does not react well to signs that inflation is on the rise or unemployment rising. Today¡¯s inflation rate is on the rise due to hurricane Katrina and high gas prices. ¡°Consumer prices rose at the fastest pace in more than 25 years last month, spurred by a surge in energy prices to record highs after Hurricane Katrina.¡± Hurricane Katrina has also affected unemployment in the U.S. After the hurricane was said and done it cost the U.S. over 500,000 jobs, and the unemployment rate rose from 4.9% to 5.1%. September was the first month since May 2003 in which U.S. payrolls declined. Payrolls however are expected to start growing again soon. However, on a brighter note, economists say that without hurricane Katrina¡¯s effects, the number of jobs would have been increased by about 200,000 in September, which is the monthly average this year. Consumer confidence fell to a two year low as well when it fell from 87.5 in September to 85 in October, the lowest it has been since October 2003. While this may be a large decrease, some economists say that it may not matter much because people seem to be borrowing and spending more money no matter how little confidence they have in the economy. The industrial production (based on output from U.S factories, mines and utilities) of the U.S. has fallen drastically as well after hurricane Katrina. The fall was quite substantial at 1.3%, to the lowest it has been since January of 1982. This drop was because of a decline in oil and gas output after hurricane Katrina.
While industrial production is down, manufacturing has increased substantially with the highest rating in over a year. One reason for this may be