April 30, 2017
This Just In
  • Emerald Expositions Events Inc. stock is set to start trading on the New York Stock Exchange April 28, 2017.
  • The offering will trade under the symbol EEX and is expected to close May 3.
  • The initial public offering price on 15.5 million shares of common stock will be $17 per share.
  • The architect for Messe Frankfurt’s new Hall 5 has been selected. Gruber + Kleine-Kraneburg will design the building, which opens in 2022.
  • The design will mirror the current two-story Hall 5, but with a column-free first level. Work begins when the Hall 6 renovation is finished.
  • The American Association of Sleep Technologists (AAST) signed with SmithBucklin to provide full-service association management services.
  • Abigail Lynn will serve as Executive Director for AAST, which will move its headquarters to SmithBucklin’s Chicago office on July 1.
  • The Albany Capital Center in upstate New York opened in March with 60+ events on the books for 2017. The overall project cost $78 million.
  • The new center, which is managed by SMG, has approximately 31,700 sf of meeting/exhibit space that can accommodate up to 5,000 people.

Four Promising Trends Could
Boost the Economy in 2014

Darlene Gudea
, President
December 2, 2013



Oceanside, CA – While Obamacare is being roasted over an open fire with critics nipping at its implementation, a new Federal Reserve (Fed) chair is quietly sailing through Senate confirmation hearings. If Janet Yellen does become the next Fed head as most experts expect, she’ll be the first woman ever to hold that position. Moreover, she will be the most influential person to steer the U.S. economy in 2014 as the President and Congress will be bogged down over Obamacare and further battles over the federal deficit and debt ceiling. Yellen’s testimony at the confirmation hearings seem to indicate a desire to extend the Quantitative Easing (QE) bond buying program until the recovery strengthens. What will this shift in delaying the QE tapering mean for the U.S. economy in 2014?

To help gain a better perspective for next year, Frank Chow, chief executive for Trade Show Executive Media Group, reviewed the major economic events in 2013 and their implications. 

  • 2013 began with significant income tax increases and sequestration.
  • This set the stage for constrained spending throughout the year as consumers became aware of the tax changes.
  • Companies doing business with the government were negatively impacted by sequestration, resulting in lost contracts. In the case of trade shows, some events were cancelled and attendance took a hit.
  • By Spring, Europe’s recession continued into the Second Quarter and China had a growth slowdown.
  • In May, current Fed Chair Ben Bernanke’s surprise QE tapering announcement sent shivers to equity and currency markets globally.
  • In Autumn, the government was shut down for 16 days while political parties battled over Obamacare and the debt ceiling. The resolution was to delay any decision until early 2014, giving both sides time to forge a compromise.
  • At the end in October, it became apparent the rollout of Obamacare was a “train wreck.”

The cumulative result from the year’s events created more uncertainty about the economy and a dramatic loss of consumer confidence by the Fourth Quarter, Chow pointed out. The Conference Board’s Consumer Confidence Index dropped sharply for the second straight month in October with a reading of 71.2. That was a drop of 9.0 below September’s 80.2. Expectations for job and business conditions for the next six months deteriorated. In November, the Reuters/University of Michigan Consumer Sentiment Index plunged to 72, a 1.2-point decline from the October final reading of 73.2, and the lowest level since December of 2012.

Furthermore, the latest National Federation of Independent Business NFIB Small Business Optimism Index seems to indicate the economy’s current momentum may stall within the next six months. “In prior recoveries, small businesses on average contributed almost two-thirds of total new hiring,” Chow pointed out. However, the monthly NFIB Index fell in October from 93.9 to 91.6, mostly due to a swoon in hiring plans and future expectations of small business conditions. Of the ten index components, seven turned negative, and 68% of the owners think the current period is a bad time to expand. The net percent of all owners reporting higher sales in the past three months fell two points to (8.0)%. Roughly 53% said they did not want a loan, and just 28% reported borrowing on a regular basis — a record low.

When Yellen assumes the reins of the Fed in February, she will face a daunting task of trying to overcome the flagging confidence and reviving an anemic economy while weaning it off the QE stimulus at the same time, Chow said. Yellen, however, seems convinced that the bond-buying program can still help the economy. She believes the benefits continue to outweigh the costs. "It's important not to remove support, especially when the recovery is fragile," she said. "I believe it could be costly to withdraw accommodation or to fail to provide adequate accommodation." Chow said her statements are a departure from Bernanke who seemed set to begin tapering sooner than later. “It appears tapering may be delayed beyond the First Quarter of 2014 and possibly until after the November elections,” he said. “Such news may keep interest rates low and cheer the hearts of investors, homebuilders, lenders and borrowers everywhere.”

However, Yellen has admitted that QE can’t go on forever. “The Fed cannot afford buying $85 billion of assets every month,” Chow warned. “Their balance sheet is already at $4 trillion and at the current pace will expand by $1 trillion a year.” He said the cost is the devaluation of the dollar to the point where investors reduce their U.S. bonds exposure, causing interest rates to skyrocket. Other risks may include a stock market bubble and runaway inflation. However, Yellen thinks the market is still reasonably valued, but acknowledges QE will have limited effectiveness as market valuations rise. “Whenever tapering begins, market reaction is likely to be severe — another reason to expect more QE under Yellen,” Chow said.

Despite the most aggressive Fed policy in history, there seems to be lukewarm credit demand from companies, large and small, Chow said. Recent business surveys point to a dim economic outlook triggered by government feuding, tax and regulation increases, and uncertainty about health care. Companies are losing faith that government can tackle the economy’s problems. Corporations would rather hoard cash to increase dividends or buyback shares. “The Fed cannot do anything about this situation,” Chow said.

On the other hand, credit availability is still tight for individuals, especially for new mortgages. New lending regulations in place to prevent a repeat of the Great Recession make it much more difficult to get a loan. The best way for credit to reach individuals is for wages and jobs to increase significantly. Instead, most home purchases are being made in bulk by investors, which are helping prices to rise, but this is not a stable long-term trend. 

“The Fed QE policy has benefited the wealthy through the equity markets and housing, but has had a very difficult time improving the plight of middle class households,” Chow said. Many economists are starting to think that the Fed is approaching the limit to how much more it can grow the economy. The Fed can help to keep it from crashing again, but Chow says the government needs to incentivize free markets to rebuild the economy. Yellen will be walking on a tight rope next year.

Fortunately, 2013 did produce four promising trends that will hopefully strengthen into next year:

  • Gas prices tumbled far below $4 a gallon nationwide. Record growth in domestic shale oil drilling has propelled the U.S. to become one of the world’s largest producers of crude oil and natural gas, despite strict regulations.
  • U.S. corporate balance sheets continue to improve. Profits, though reduced from last year, still managed to surprise analysts’ lowered estimates in the Third Quarter. Top line revenue has slowed but is growing as more firms are expanding overseas. At some point, corporations will need to invest their estimated $2 trillion in cash to continue growing.
  • Housing prices have risen this year, mainly from mass home purchases by big investors. Higher prices meant fewer homes underwater and thus fewer foreclosures. Foreclosure starts have been down nationally on an annual basis for 15 months in a row, while home repossessions have fallen for 11 consecutive months. With rates likely remaining low due to Yellen’s more dovish policy stance, we can expect more improvement in housing next year.
  • Led by technology stocks, all three of the U.S. market indexes have logged double-digit increases for 2013. The Dow Jones industrial average rose 19% this year, topping the 16,000-mark for a second straight day on November 22 (its 41st record finish in 2013); the S&P 500 jumped 24% so far this year and closed above 1,800 for the first time; and the NASDAQ climbed 30% to 3969. Wall Street money manager Doug Dachille, says the Fed's post-crash policy of easy money has driven up the price of assets like stocks, instead of prompting investment and spending, as hoped. Will it be sustained or is it a house of cards is the million dollar question.

A November Gallup poll showed that Americans expect to spend an average of $704 on Christmas gifts, down from $786 in the prior month. Morgan Stanley anticipates that during the Fourth Quarter, retailers will see a meager 1.7% increase in sales at stores open at least a year despite the most intense promotional holiday environment since 2008. Price-slashing will emerge earlier in the season to attract shoppers at the expense of profit, according to the report. Some retailers are opening their doors on Thanksgiving evening instead of the traditional Black Friday. "Shopping early has become a very real trend with consumers today as they look for ways to spread out their budget, and retailers have answered their call with attractive holiday offerings as early as October,” said National Retail Federation President and CEO Matthew Shay. With that, consumers may be the winners this season — let’s go out and do our part to spread some holiday cheer and pump up the economy. Happy Holidays!