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If you love Adidas' clothing and footwear then I have some good news for you. Adidas is eying to open about 2,300 new stores in China by 2010, lifting its total number to 6,300. The company's decision came as a result of strong demand from China even in times when we might expect to see some downturns.

Frederic Seiller, a vice president in charge of retail operations for Greater China, stated that the the global economic slowdown had no impact on Adidas's sales in China. In addition, the company is optimistic about its further gains, and forecast a nice demand from the local sportswear market. From this point of view, total sales in China are expected to come to 1 billion euros by 2010.

As well as getting growth in revenue, by opening its biggest store in the world in central Beijing Adidas aims to beat rival Nike Inc. (NYSE: NKE). Back in 2007, China became Nike's second-largest market, and its Chinese sales reached $1 billion in 2008.

In an attempt to curb all the 'hot money' flowing into China, the Chinese government will start checking exporter's foreign exchange settlements. Government control of the exchange rate has what has created this problem in the first place. The way to curb this problem is for the Chinese to freely float their currency and let it appreciate to the level that the market thinks it should be trading it.

The government is desperate to cool the flow of money coming into to China as it's trying to fight surging inflation. According to an article in Bloomberg: " China's foreign exchange reserves, the world's largest, surged 40 percent to a record $1.68 trillion in March from a year earlier, according to the latest official data. The excess cash flooding the financial system may stoke 12-year-high inflation in the fastest-growing major economy."

Most analysts are of the opinion that these checks are impractical and won't solve the problem. How many people will the government have to hire to wade through all these transactions? On the other hand maybe this is how China will solve the problem that they will have after the Olympics finish, and the government works projects come to an end. They can hire all of the unemployed and have them check all the transactions.

The real solution: Float the Yuan.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer's fund has no position in any stock mentioned, as of 7/3/08.

Japan's Nikkei Index, the weighted average of 225 stocks in major companies, fell for the 10th day. That has not happened since 1965.

According to the FT, "Rising fears about the impact of inflation on slowing economies took their toll on Japanese and other Asia-Pacific markets." That sounds a bit like the current trouble in the US.

A number of other indicies have had sharp declines lately. The Shanghai Composite has fallen by more than half since late last year. Rising energy and food costs in China have not helped it. Neither have concerns that a recession in the West could cut demand for its exports.

The Nikkei news says two things. The first is that the economies in other large nations may be as troubled as that in the US. Traders often look out several quarters when they make their buying or selling decisions. But, the second, more ominous sign from the Nikkei's decline is that it says that the smart money in Japan believes that the price of oil is not likely to fall. Japan is relies more on imports of crude that the US does.

The tough run for the Nikkei is not restricted to Japan. US and EU markets are likely to set records of their own, and not the kind that traders look forward to.

Douglas A. McIntyre is an editor at 247wallst.com.

I finally got around to investing a portion of my stimulus check. I had a few stocks in mind for the money, but at the end of the day, I decided that I should buy shares of a high-yielding blue chip for the very long term. It really wasn't a difficult decision. The winner of my stimulus-check buy was none other than General Electric (NYSE: GE).

I've been talking about GE a lot lately, but if you're an investor, you know there's a lot to talk about this conglomerate. No, I don't mean fundamentally, necessarily, I mean that its current yield is simply amazing. GE has dropped a lot this year, and it's gotten the attention of many value investors. In fact, I purchased some GE shares not too long ago when they were trading about six bucks higher than the current price for what I hoped would be a short-term trade. I admit it, I was wrong.

I still think my reasoning at the time was correct, and I continue to hold those shares, but I also hold a long-term position of GE that I add to several times a year with the intent of holding for the next couple decades, maybe even beyond that. It is this position that received the shares acquired through the beneficence of the government. Although some might argue that I should have improved the cost basis of my trade, I decided against such action, since I think GE might be down for a while. If I wanted to use the money for a trade, there are probably better ideas out there for it than GE. But long-term, GE's current 4.7% yield will probably turn into an effective yield of better than 20%, assuming the dividend continues to rise in the future as it has in the past (I believe it will).

The only other stock that provided real competition for my stimulus windfall is Coca-Cola (NYSE: KO). However, the GE yield was just too beautiful. Granted, Coke is obviously the more focused business, and its brand equity is impeccable. But a near 3% yield is no match for a 4.7% yield. I think I made the right decision, but time will tell. No matter what, though, anyone who buys GE now better be patient. Short-term traders might not be rewarded.

Disclosure: I own Coke and GE; positions can change at any time.

Initial U.S. jobless claims increased 16,000 to 404,000 for the week ended June 28, the U.S. Labor Department announced Thursday.

Claims for the previous week were revised 2,000 higher to 388,000.

Economists surveyed by Bloomberg News had expected this week's initial jobless claims to total 385,000.

Also, the 4-week moving average increased 11,250 to 390,500. Economists view the four-week average as a better indicator of unemployment conditions, as it smooths out anomalies for strikes, holidays, or other idiosyncratic events.

Economist Peter Dawson said Thursday the jobless claims picture indicates economic conditions are worsening in the United States. "We're now above 400,000 in new claims. This is a sign the economy is stalling. Earlier, we did not see jobless claims as high as in previous slowdowns, but the job slide is accelerating, so in my view GDP will definitely be negative in Q2," Dawson said. "We've got to find a way to jump-start both jobs and demand or this economy will suffer a deeper recession."

The New York Times reports that the European Central Bank raised its equivalent of the Fed Funds rate to 4.25%. Meanwhile, Bernanke's economic wrecking crew has kept the U.S. rate at 2%. Investors will sell dollars and buy Euros. That will cause the dollar to lose even more of the 72% it's lost since January 2001. But none of this is really happening because AFP reports that President George Bush has declared that "we're strong dollar people."

The key to U.S. policy is repeated denials of the obvious -- which is that U.S. policy is consistently intended to weaken the dollar. The reason is that a weak dollar makes the goods of big U.S. corporate exporters relatively cheap when they sell overseas. And of course, since oil is traded in dollars, a weak one causes the price of oil to spike. It now resides at a comfortable $146 a barrel, up 508% since January 2001.

But Reuters reports that Treasury Secretary Hank Paulson -- who last year brought us "subprime is contained" -- now says that the weak dollar is not to blame for high oil prices. With apologies to the old E.F. Hutton advertisements -- which said "When E.F. Hutton talks, people listen" -- when Hank Paulson talks, people snicker.

The U.S. economy lost another 62,000 jobs in June, the U.S. Labor Department announced Thursday, as surging fuel prices forced companies in the world's largest economy to continue to cut expenses to protect profits in the face of the economic slowdown.

Meanwhile, the unemployment remained at 5.5% in June, the highest level since October 2004.

Economists surveyed by Bloomberg News had expected the U.S. economy to shed 50,000 jobs in June. Furthermore, June was the U.S. economy's sixth straight monthly job loss. The U.S. economy lost a revised 62,000 jobs in May, up from the 49,000 earlier estimate; the U.S. economy lost 28,000 jobs in April.

The June job losses brought total job losses in 2008 to 438,000, the Labor Department said.

Meanwhile, the number of unemployed persons was unchanged at 8.5 million in June. Since March 2007, the number of unemployed persons has increased by 1.2 million, and the unemployment rate has risen by 1.5% point.

Stock futures were mixed early Thursday morning, the last and shortened day of trading this week -- markets will close at 1 p.m. EDT. Oil, again, has reached new highs as investors awaited the ECB decision on interest rate. Wall Street is also anxious about the upcoming jobs report, especially after Wednesday the ADP employment figures were worse than expected. Today's session will likely be choppy.

Despite starting the day on a positive note Wednesday, U.S. stocks ended sharply lower after the ADP employment figures damped mood on the Street. Also, crude oil prices rose sharply and an analyst warned that General Motors (NYSE: GM) may have to consider bankruptcy at some point; GM stock closed below $10 a share. The Dow industrials tumbled 166 points, or 1.46%, entering bear territory -- down over 20%, the Nasdaq Composite lost 53 points, or 2.32%, and the S&P 500, fell 23 points, or 1.82% - the only major index still not in bear territory.

Soon, at 7:45 a.m. EDT, the European Central Bank will announce its decision on interest rates. The ECB is widely expected to increase rates, which in turn could further weaken the dollar, driving oil prices higher.

Then, at 8:30 a.m., the Labor Department will release the June payroll figures. Economists expect the unemployment rate to fall to 5.4% from 5.5% last month, but job losses are expected to rise to 60,000 positions, up from 49,000 in May, according to Briefing.com.

At 10:00 a.m., the June ISM services index will be released, and another decline is expected.

Let's just say that if the Dow Jones Industrial Average on Thursday closes down 200 points, we'll call it a moral victory. The Dow Wednesday closed down 166.75 points to 11,215.75.

"What was that famous Bette Davis line about a bumpy night? Well, Thursday could be a bumpy day," economist Peter Dawson told BloggingStocks Wednesday.

Thursday could be very bumpy for the stock market because a series of data points -- all expected to be negative -- are converging at a traditionally difficult time of the year for the market - the start of summer.

Three data points of significance

First up is the European Central Bank's interest rate decision at 7:45 a.m. EDT, at which the bank is expected to increase its key, short-term interest rate, the refinance rate, by a quarter-point to 4.25%. The ECB is trying to check inflation, Dawson said, but it may end up hurting the dollar. If the markets believe the already-weak dollar will fall further, that will increase commodity prices, including oil, "which will not be good news for stocks," he said.

The weak market conditions have caused many stock prices to fall under $10. Not only smaller -- and perhaps lesser known -- stocks trade under $10 these days, but also some big and famous names such as Ford Motor Co. (NYSE: F), Motorola Inc. (NYSE: MOT), Sprint Nextel Corp. (NYSE: S), Washington Mutual Inc. (NYSE: WM) and Del Monte Foods (NYSE: DLM), as well as many airline companies like Northwest Airlines (NYSE: NWA) and JetBlue (NASDAQ: JBLU).

While those names could sound tempting for investors who may think they are cheap, BusinessWeek's Karyn McCormack reminds us that not everything that is cheap is a good bargain, and there are some risks that need to be taken into account.

One common problem for most of these stocks is that they trade under $10 for a reason. That reason is usually hardly any earnings growth, if any at all. And with a weak economy, these companies would have an even harder time to stimulate growth. Add to the mix the fact that institutional investors don't like to touch stocks under $10 and the potential for recovery is not good.

Factory orders increased 0.6% in May, the U.S. Commerce Department announced Wednesday, on rising demand for computers and defense equipment. It was the third consecutive monthly rise in factory orders, the Commerce Department said. Excluding the often-volatile transportation component, factory orders increased 0.4%.

Economists surveyed by Bloomberg News had expected May factory orders to increase by 0.6%. Factory orders increased a revised 1.3% in April.

Economists follow the factory orders statistic because it provides one of the most comprehensive surveys of advance orders for durable goods -- how busy factories are likely to be in the period ahead. Factory orders also are a major value-added component of the U.S. economy.

In May, new orders rose 1.2%, bookings increased 0.6%, shipments rose 0.1%, and unfilled orders increased 0.1%. Also, the inventories-to-shipments ratio was virtually unchanged in May at 1.23, compared to 1.22 in April.

In the first half of 2008, the S&P 500 fell 12%. June's stock market was the worst since 1930. So are stocks now a screaming buy or are they poised to plunge further? Nobody knows. But my guess is that stocks will move based on how well they perform compared with expectations. And the risk of negative surprises in most industries exceeds the chance of positive ones. So stocks will probably keep falling.

Here's a quick review of six negatives:

• Oil prices. With oil at $142, up 492% since January 2001, consumers are paying about $4.10 a gallon for gas and companies that use oil are getting squeezed while trying to raise prices. An attack on Iran, a big oil supplier, looms on the horizon. This and other geopolitical uncertainties could put further pressure on oil.
• Housing. Three million people are expected to face foreclosure on their homes. And prices have dropped 15%. Since people were using home equity to finance their purchasing, their negative equity is sucking the wind out of the economy.

Non-farm private employment decreased 79,000 in June on a seasonally adjusted basis, ADP announced Wednesday in the ADP National Employment Report. (pdf)

Meanwhile, the May estimated change in employment was revised down 15,000 to a gain of 25,000 jobs, ADP said.

In the June jobs report, employment in the service-providing sector fell 3,000, its first declined since November 2002. The goods-producing sector declined 76,000, and manufacturing employment fell 44,000, their 19th and 22nd consecutive monthly declines, respectively.

Employment among small-size businesses, defined as those with fewer than 50 workers, rose just 7,000 during the month, while employment at large businesses with more than 500 workers declined 51,000. Jobs at medium sized business, with 50-499 employees, decreased 35,000.

It is reasonable to believe that as the cost of crude rises, demand will fall. It is in the Economics 101 textbooks. It has to to be true.

Not so, says The International Energy Agency. According to The New York Times, the think tank says "the small decline in oil demand in the industrialized countries will be more than offset by an estimated increase in demand of 3.7 percent a year from 2008 to 2013 in developing countries, particularly in Asia, the Middle East and Latin America."

The argument has the benefit of making sense. Asia, especially China, cannot keep up its GDP growth without gas to drive its transportation industry. It has cut the amount it provides to underwrite the price of diesel and gas, but it has not eliminated the practice. Driving a car or truck on the mainland is still cheap.

In the Middle East and Latin America, many of the countries are net exporters of crude. Brazil recently claimed that it found one of the largest oil deposits ever discovered. The field are just off its coast in the ocean. Many of the nations with excess oil will keep some of that at home to build their own infrastructures.

Oil prices are staying high whether the US can afford that or not.

Douglas A. McIntyre is an editor at 247wallst.com.

U.S. stock futures were higher Wednesday morning, as Wall Street could try to having yet another positive session. While Starbucks news of store closing and reports Microsoft may still be interested in Yahoo helped lift sentiment, UnitedHealth already issued a warning this morning. Employment data is also on tap before the market opens.

U.S. stocks finally ended higher on Tuesday. Surprisingly, it was car sales that helped the mood on the Street as as June sales came in not as bad as expected. The Dow industrials ended 32 points higher, or 0.28%, the S&P 500 added 4 points, or 0.38%, and the Nasdaq Composite added 11 points, or 0.52%.

Today, investors will have the ADP June private sector employment figures to chew on ahead of the government's report tomorrow. The employment report is expected to be released at 8:15 a.m. EDT. Then, at 10 a.m., May factory orders are due out.

Also on the docket today is weekly crude inventories, usually released at 10:30 a.m. EDT. While oil came off highs Tuesday due to a slightly stronger dollar, it again rose above $141 a barrel Wednesday, due to persistent supply concerns that has analysts warning of higher prices yet. An IEA report saying supplies will remain tight and demand will likely grow despite higher prices helped push prices higher.