Article Analysis

ArticleAnalysis

Ina Wall Street Journal article titled “The Missing Boom in SmallBusiness Sales” published on 14thOctober this year, Ruth Simon explores the position of baby boomersin the US economy. She notes that the much anticipated massive saleof the small business ventures owned by baby boomers is yet toactualize. Baby boomers refer to American citizens born between 1946and 1964. In the article, Ruth holds the opinion that most babyboomers are holding onto their businesses longer than expected.

Asmost baby boomers clock 55 years and above, economic forecasters hadpredicted that they would sell out their businesses to youngerAmericans as they head into retirement. However, this does not appearto the case. Even at 60 and above, most baby boomers are still notwilling to let go of their business ventures. Going by figuresreleased by the United States Census Bureau in 2013, 38% of businessowners in the US were aged 55 and over. This number, compared to the29% in 2005, shows that the number of baby boomers who own businessesis going up, not down as expected.

Severalreasons have been advanced to explain this trend. For instance, somesmall family owned ventures are yet to recover from the effects ofthe 2010 recession. Younger family members in other cases are notwilling to take up the management of businesses from the boomers. Onthe flip side, most baby boomers are also not ready to hand overtheir businesses to younger family members or other entrepreneurs.They insist that they are not yet dead. As a result, they should notbe sidelined on the basis of their age as far as business ownershipis involved. Lastly, most boomers are skeptical about handing overtheir lifetime investments. They insist on being actively involved inmanaging the businesses as they train the new owners and staff to dothings in they way they feel right.

Reference

“TheMissing Boom in Small-Business Sales” by Ruth Simon retrieved fromhttp://www.wsj.com/articles/the-missing-boom-in-small-business-sales-1444865868

ArticleAnalysis

“GlobalStocks Rally as Fed Remains Uneasy on Inflation”by Corrie Driebusch and Chiara Albanese Inthis article published in the Wall Street Journal on 9thOctober this year, the authors Corrie Driebusch and Chiara Alabanesetake a look at the stock markets situation. They compare how themarkets are faring compared to the beginning of the year. They arguethat, currently, stock markets have registered their best weeklyperformances in many months. According to them, this positive changein the stock markets business comes as a result of the current stableprices of oil that gives oil companies a comparative advantage overother investors. Atthe time the article was published, a barrel of oil was almosthitting the market price of $50 a barrel. However, the price did notgo above the $50 mark. The greatest influence on this rise in theprice of oil in the US is the projected local production of oil inthe US. The price of oil that week was the highest it had reachedafter recovering from the lowest price in six years it had hit inAugust this year. This gain seems to beat the ongoing weak season andgradually increasing stockpiles of oil in the US. Basedon the points of views of the authors of the articles, the connectionbetween the price of oil and global stock markets come to light. Thedemand and supply of oil affect its price that in turn affects thatstate of stock markets. As per the article, the price of oil went upby 9% compared to the last five trading sessions. A rise in the priceof oil translates to a rise in the profits that oil production andexploration companies make. When oil these companies make profits,their shares in the stock markets like Dow Jones and S&ampP gainmore value attracting more investor to buy or sell them. This showsthe relationship between stock markets and oil prices. Theauthors indicate that the Dow Jones index rose by 3.7% while that ofthe S&ampP %00 went up by 3.3%. The authors argue that this wastheir best weekly performances from February. Brett Mock, themanaging director at JonesTrading Institutional Services, is quotedin the article asserting that they had a strong run since theprevious week, and he added that the income are now in focus. He alsomentioned that long-term investors are banking on the earnings andwaiting to see how things go for the rest of the year. Thehigh gains in the stock markets in the article come from a backdropof months of low performance of the stock markets. As a result,investors are ardent to see what happens to the stocks especially ininternational companies. However, investors are more worried aboutwhat is said about their stocks more than what they will earn. Thebad months of the earlier period and the doubt of the future makes itdifficult to predict what the earrings will be at the closure of thecompanies’ fiscal year. Apart from the stock markets, the rise inthe price of oil had varied effects on other markets in the US andacross the globe. For example, the yield of US Treasury notes isdirectly affected by oil prices. Their relation is inverse, a rise inthe price of oil causes a fall in yields. By the publication of thearticle, the yield dropped from 2.108% on Thursday to 2.099% onFriday the same week. Insummary, the article illustrates the positive change in stock markettrading in the past few weeks compared to the weeks and monthsbefore. Market elasticity was high in August and September. Thistrend had greatly worried investors as earnings from their stockswere in doubt. However, the week during the publication of thearticle comes with much needed and welcome positive changes in theequity markets, thanks to the rise in the price of oil in the UnitedStates. References“Global Stocks Rally as FedRemains Uneasy on Inflation”by Corrie Driebusch and Chiara Albanese retrieved fromhttp://www.wsj.com/articles/global-stocks-rally-as-fed-remains-uneasy-on-inflation-1444377554