Worldwide Bull Market Rally Hits 18-Month High

The MSCI World Stock Market Index reached an 18-month high today of 1,212.14, the highest closing index level since late September 2008. Compared to a year ago, world stock markets have risen by more than 48%.

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(Reuters) - "Factories in the United States, Europe and Asia cranked up production last month, suggesting recovery from a deep recession was taking root in economies around the globe. The U.S. manufacturing sector grew at its fastest pace in more than five years last month and activity in Europe bounced higher, with a cheaper euro helping stimulate exports. UK manufacturing expanded at its fastest pace since 1994, while China's vast industrial sector also grew in March."

How Mobile Phones and IT Promote Economic Development in Africa and Even Increase Literacy

Some excerpts from an excellent Boston Reivew article "Africa Calling: Can mobile phones make a miracle?" by economsits Jenny Aker and Isaac Mbiti:

"There are some good reasons to believe that mobile phones could be the gateway to better lives and livelihoods for poor people. While some of the most fundamental ideas in economics about the virtues of markets assume that information is costless and equally available to all, low-income countries in sub-Saharan Africa are very far from that idealization. Prior to the introduction of mobile phones, farmers, traders, and consumers had to travel long distances to markets, often over very poor roads, simply to obtain price (and other) information. Such travel imposed significant costs in time and money.

Mobile phones, by contrast, reduce the cost of information. When mobile phones were introduced in Niger, search costs fell by half. Farmers, consumers, and firms can now obtain more and in many cases “better” information—in other words, information that meets their needs. People can then use this information to take advantage of arbitrage opportunities by selling in different markets at different times of year, migrating to new areas, or offering new products. This should, in theory, lead to more efficient markets and improve welfare.

An emerging body of research suggests that perhaps theory is meeting reality. In many cases, these economic gains from information have occurred without donor investments or interventions from non-governmental organizations. Rather, they are the result of a positive externality from the information technology (IT) sector.

African governments, donors, mobile phone companies, and NGOs recognize the potential of mobile phones in many arenas of economic development. An emerging trend is the development of mobile phone-based services and products—applications or “apps”—that go beyond basic voice calls. In wealthy countries apps have mainly been sources of entertainment, but in poorer countries, they provide opportunities for disseminating market information, monitoring health care, and transferring airtime and money. In most cases these apps are developed by the private sector and then adopted (and adapted) by the development community. Projects in agriculture, health, education, and governance increasingly rely on the services uniquely available via mobile phones.

Simple and affordable mobile phones are also being used as a means to promote adult literacy in Africa. In addition to a regular literacy curriculum, adults in the Nigerien village of Falenko learn where to find letters and numbers on a mobile phone and how to send and receive SMS messages. Within four months, students are able to practice their newly acquired literacy skills by sending SMS messages to their friends and family. In a country without vernacular newspapers and village libraries, SMS makes literacy functional. Early results suggest that students who use a mobile phone as a learning device make faster progress and achieve greater literacy than those relying solely on traditional classes. Similar mobile-literacy projects are starting in Senegal, and others in India are using smart phones and mobile games as teaching tools for children."

Wal-Mart Sometimes More Selective Than Harvard

April 1 (Bloomberg) -- Harvard University admitted a record-low 6.9 percent of students seeking undergraduate admission after attracting the most applications ever, including almost 3,600 from seniors ranked first in their high school. Harvard College offered admission to 2,110 of this year’s 30,489 applicants. Last year, the Cambridge, Massachusetts, college accepted 7 percent."

Harvard is obviously very, very selective when offering admission to its applicants, but at least on some occassions, Wal-Mart is even more selective when offering jobs to its applicants.

(Crain's, January 2006) — The new Wal-Mart Stores location opening Friday in suburban Evergreen Park, Illinois received a record 25,000 applications for 325 positions, the highest for any one location in the retailer’s history, a company official says. Wal-Mart's Chicago-area manager Chad Donath said generally stores receive between 3,000 and 4,000 applications for about 300 to 450 positions.

That would mean Wal-Mart accepted only 1.3% of job applicants at its Chicago store, making it harder to get a job at Wal-Mart than gain admission to Harvard University. Of course, Wal-Mart's normal acceptance rate is closer to 10%, making it slightly less selective than Harvard on average.

Bottom Line: Just like Harvard has to be a pretty desirable place to attend college since it gets more than 14 applications for every opening, Wal-Mart must be a pretty desirable place to work if it routinely gets 10 applications for every job opening. And yet the standard assumption is that Wal-Mart's wages are unreasonably low. A Google search of Wal-Mart and "low wages" results in 47,000 hits.

But with Wal-Mart receiving 10 applications per position, you could actually make a stronger case that Wal-Mart's wages are actually TOO HIGH. That is, Wal-Mart could lower its wages considerably and still have too many applications.

Feb. Restaurant Index Highest Since Nov. 2007

"Driven by a solid improvement in restaurant operators' outlook, the National Restaurant Association's comprehensive index of restaurant activity rose to its highest level in 27 months in February (see chart above). The Association's Restaurant Performance Index (RPI), a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry stood at 99.0 in February, up 0.7 percent from January and its strongest level since November 2007.

However, despite the solid improvement, the RPI remained below 100 for the 28th consecutive month, which signifies contraction in the index of key industry indicators. The RPI's strong gain in February was the result of broadbased improvements among the forward-looking indicators. Restaurant operators' optimism for sales growth stood at its strongest level in 29 months, with capital spending plans also rising to a two-year high."

March ISM Manufacturing Index Highest Since 2004

"Economic activity in the manufacturing sector expanded in March for the eighth consecutive month, and the overall economy grew for the 11th consecutive month, say the nation's supply executives in the latest Manufacturing ISM Report On Business (see chart above).

The manufacturing sector grew for the eighth consecutive month during March. The rate of growth as indicated by the PMI is the fastest since July 2004. Both new orders and production rose above 60 percent this month, closing the first quarter with significant momentum going forward. Although the Employment Index decreased 1 percentage point to 55.1 percent from February's reading of 56.1 percent, signs for employment in the sector continue to improve as the index registered a 10 percent month-over-month improvement, indicating that manufacturers are continuing to fill vacancies. The Inventories Index provided a surprise as it indicated growth for the first time following 46 months of liquidation — perhaps signaling manufacturers' willingness to increase inventories based on expected levels of activity."

MP: Add this to the growing list of V-shaped signs of economic recovery, especially in the manufacturing sector. Notice that the recovery of manufacturing activity since mid-2009 is much stronger than the recovery in the period following the 2001 recession, and we're quickly approaching the peak manufacturing activity reached in 2004.

Jobless Claims (4-Week Avg.) Fall to 80-Week Low

The Department of Labor reported today that jobless claims (4-week average) fell to 447,250 last week, the lowest level since mid-September 2008, meaning that jobless claims fell to an 80-week low (see chart above). From the peak in April 2009, jobless claims have fallen by 195,750 over the last year. Jobless claims (4-week average) have fallen for each of the last three weeks, and have declined in six out of the last eight weeks. The worst of the labor market problems are definitely behind us, as jobless claims have trended down for the last year. Compared to the 643,000 claims a year ago in early April, we've made a lot of progress, and the trend should continue.

Monster Employment Index Rises 6% from 2009

"The Monster Employment Index (MEI) had a monthly rise of one point in March, as employers continued to expand hiring efforts at the end of the first quarter. The annual growth rate in the MEI accelerated in March, with the current online demand level six percent above where it was a year ago.

“We’re encouraged by the positive uptick in the Index in the past two months,” said Jesse Harriott, senior vice president and chief knowledge officer at Monster Worldwide. “The Index results may be a signal that companies intend to start hiring again. While the labor market continues to be challenging for those looking for work, we are encouraged to see early signs of what may be a return to consistent job growth.”

Highlights include:

• New growth in real estate, rental and leasing; and construction industries; public administration and information decline.

• Continued gains in healthcare practitioner occupations, while community and social service; protective service and business edge down.

• Online job demand rises in all of the 28 major metro markets, with Orlando showing strongest monthly gain."