For Immediate Release

Chicago, IL – October 12, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Ford (F), Honda (HMC), Caterpillar (CAT), Boeing (BA) and Chevron Corp. (CVX).

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Here are highlights from Friday’s Analyst Blog:

Trade Deficit Improves

While the year-over-year improvement in the trade deficit is very good news, the reason for it is not so good. It was a reflection of the overall collapse in world trade, something that makes everyone poorer. As far as the GDP calculations are concerned, it does not make any difference

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In August, the monthly trade deficit fell to $30.7 billion from $31.9 billion in July. We got improvement from both sides as exports rose by $0.2 billion to $128.2 billion and imports fell to $158.9 billion from $159.8 billion in July, a decrease of $0.9 billion. This reverses two months where the trade deficit rose slightly. On the other hand, over the last year the trade deficit is down dramatically. A year ago our imports were $63.6 billion higher than now, at $222.6 billion, and our exports were $33.4 billion higher at $161.7 billion, resulting in a deficit of $60.9 billion. While the year-over-year improvement in the trade deficit is very good news, the reason for it is not so good. It was a refection of the overall collapse in world trade, something that makes everyone poorer. As far as the GDP calculations are concerned, it does ...

The dollar is on the rebound against the euro [0], [1]. The non-oil trade deficit is shrinking as a share of GDP [2]. Is this a replay of the 1980's adjustment process?

A month ago at a conference in Siena, Gian Maria Milesi-Ferretti outlined the similarities and differences between the two episodes cogently (while the presentation is not online, but some of the points are recapped in this speech by IMF DMD Lipsky, here). He summarized the changes in various macro aggregate in the upswing and the downswing of the dollar in the two episodes in two sets of figures.

A comparison with the 1980's: The dollar appreciation period A comparison with the 1980's: The dollar depreciation period

Milesi-Ferretti highlights the differences:

Adjustment in the 1980s

Helped by oil prices Large transfers in 1991 associated with first Gulf war

Current

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