By Jason Simpkins Associate Editor Air China announced yesterday (Wednesday) that it will buy 45 The Boeing Company (BA) jets to help cover increased domestic demand at a time when many Western airlines are struggling to overcome high fuel prices and declining traffic. Air China will buy 15 Boeing 777s and 30 Boeing 737s at a cost of $6.3 billion, the company said on its website. The purchase will increase Air China’s fleet by 35%, as the company competes with other Chinese carries for a dominant share of a market that is expected to grow 9% annually over the next several years, The Associated Press reported. Whereas commercial airlines in developed markets have been struggling, with some even collapsing under the weight of high fuel costs and sluggish demand, airplane manufacturers have been buoyed by strong demand in emerging markets ...

By Jason Simpkins Associate Editor Brazilian stocks as measured by the country’s Bovespa benchmark stock index has fallen 20% from its May 20 record, but that doesn’t mean it’s time to give up on Latin America’s largest economy. Brazil still has plenty to offer, and with stock valuations low, it’s a good time to go bargain hunting. In fact, a big reason why Brazilian stocks have dropped is because the country’s central bank has been forced to raise rates to curb inflation. Policymakers have raised the benchmark rate twice since April, to 12.25%. Of course, inflation isn’t a problem unique to Brazil. Inflation in India has been at alarmingly high levels since the first week of June, when it jumped from 8.75% to 11%. And many analysts expect government data released today (Friday) will show wholesale prices soared to a 13-year high of ...

By Jason Simpkins Associate Editor First-quarter growth in the 15-nation Eurozone was weaker than first reported, yet another worrying development for a region already struggling with soaring inflation. The combined Eurozone economy grew by 0.7% in the first quarter compared to the three months prior, revised down from a previous forecast of 0.8%, Eurostat reported. While the figure is still relatively strong, a U.S. slowdown, rampant inflation, and low consumer demand could drag the economy down even further in the second half of the year. The European Commission’s gauge of consumer confidence declined to a level of -17 in June from -15 in May. Economic sentiment declined to 94.9 from 97.6 in May. Much of the decline was attributed to a steep rise in Eurozone inflation, which hit a 16-year high of 4% in June. “The surge in food and energy prices is ...

By Jason Simpkins Associate Editor Merrill Lynch & Co. Inc. (MER) has raised its annual infrastructure-spending estimate for emerging markets by 80%, as developing countries try to keep pace with fast-growing economies and large cash reserves, BusinessWeek reported. Investment in infrastructure, which the firm sees as the long-term solution to inflation, will rise from $1.25 trillion to $2.25 trillion annually over the next three years. And China, the Middle East, and Russia will account for 70% of infrastructure spending. The report from Merrill Lynch pointed out that Xstrata PLC (OTC: XSRAY) recently predicted emerging markets would spend $22 trillion on infrastructure in the next 10 years. “That estimate is among the highest we’ve seen,” the report noted, “with an implied run rate of $6.6 trillion over the next three years.” Estimated Infrastructure Spending For the Next Three Year...

By Jason Simpkins Associate Editor After a disappointing string of failed takeovers, CNOOC Ltd. (ADR: CEO) has reignited its foreign expansion initiative with a $2.49 billion buyout of Norway’s Awilco Offshore ASA. China Oilfield Services Ltd., a unit of China’s top offshore oil and gas producer will pay $16.66 (85 kroner) a share, an 18.7% premium to last week’s closing price. Awilco’s board unanimously approved the offer and the deal, which still requires regulatory approval, but should be closed by October. China Oilfield will borrow about $2.3 billion to finance the deal. "I think 85 kroner a share is a good price," Stian Eliassen, an analyst at Carnegie ASA in Oslo, told Bloomberg News. "They’re very interested in Awilco’s jack-up rigs, seven of which will be available to be leased by clients next year."...

By Mike Caggeso Associate Editor Embattled carmaker General Motors Corp. (GM) is planning thousands of additional white-collar job cuts and mulling over the sale off some of its brands, sources told the Wall Street Journal. The strategic shifts are part of General Motors’ plan to return to profitability by 2010, a goal that will require a lot of changes to the company model. And they come at a time when U.S. auto sales are the slowest in 15 years, gas prices have edged above the $4-a-gallon mark, and GM’s stock is trading at a 54-year low. The decision on the job cuts will come at the No. 1 automaker’s board of directors meeting in August, where the GM board may also entertain management’s suggestions about trimming its number of brands, sources told the paper....

By Mike Caggeso Associate Editor Silver prices have vaulted an extraordinary 106% in the past two and a half years. More impressive, silver prices have gained 33% since mid December. Now, compare that to how U.S. stocks have fared since then: The Dow Jones Industrial Average has plunged 13.6%; The Nasdaq Composite Index tumbled 10.5%; The S&P 500 Index has fallen 11.1%. Like gold, silver is a safe haven from inflation and a weak dollar. The prices of the two metals often move parallel to one another. However, silver is poised to rocket - handing investors not only gains in our bear-market economy, but steeper gains than gold. James Turk, founder of GoldMoney, said in his annual forecast that the U.S. economy "will get much worse in 2008, making gold the premier asset of choice, but not the best performing precious ...

By Jason Simpkins Associate Editor Payrolls tumbled for the sixth consecutive month in June, bringing the total number of job losses in the first half of the year to 438,000. Such a steep drop in employment could easily cause consumer spending to falter in the months ahead and drag the economy into a recession. After shedding 62,000 jobs in May, U.S. employers slashed another 62,000 jobs in June, the Labor Department said last week. Builders reduced payrolls by 43,000 after cutting 37,000 employees in May. Financial firms cut 10,000 jobs in June after losing 3,000 the month prior. And factory payrolls dropped by 33,000 after declining 22,000 in May. The national unemployment rate has gone up by a full percentage point in the past year, hitting 5.5% in May. The country added 91,000 on average in 2007, but has lost an average of ...

By Mike Caggeso Associate Editor Plagued by plummeting U.S. sales and $4-a-gallon gasoline, General Motors Corp. (GM) may sell its four-foot-tall Chevrolet Beat in U.S. markets, sources told Bloomberg News. The subcompact three-door hatchback was unveiled at last year’s New York International Car Show, though GM said it would be produced overseas and wouldn’t immediately be sold in the United States. However, both U.S. production and sales are possible, the sources said. U.S. government fuel efficiency mandates are also playing a role. By 2020, automakers are required to reduce fuel use by 40%. GM at least knows drivers around the world are excited about the Beat compared to two other prototypes it unveiled. Votes of an online poll on GM’s Web site overwhelmingly preferred the Beat, which received 1.8 million votes worldwide. "The people have spoken. The vote count tripled all previous ...

By Jason Simpkins Associate Editor Crude futures closed at yet another record high yesterday (Wednesday) after government data showed a decline in crude inventories. The news followed a separate report from the International Energy Agency that said oil supplies would remain tight through 2013. The U.S. Energy Department yesterday reported a decline of 2 million barrels in crude supplies last week. As a result, August crude climbed $2.60 to settle at an all-time high of $143.57 a barrel in New York. In a separate report, released Tuesday, the Paris-based IEA, said supplies of crude would remain tight for the next five years, as surging demand from emerging markets overwhelms a softening in developed countries. “Structural demand growth in developing countries and ongoing supply constraints continue to paint a tight market picture over the medium-term,” the IEA said in its Medium-Term Oil Market Report. ...