Financial News 4/8/12 – 4/14/12

Economy

-Revolving consumer credit, which mostly is represented by credit cards, fell in February for the second straight month as consumers try to reduce expenses.  4/9

-The number of unemployed people per job opening declined to 3.66 in February for the lowest level since 2008.  4/11

-Industrial output in the Eurozone fell 1.8% in February compared to a year earlier, its largest drop in 2 years.  4/12

-Unemployment insurance claims rose substantially last week up 13,000 to 380,000.  The previous week’s report was also revised upwards.  4/13

-China’s first quarter GDP of 8.1% disappointed as it was lower than estimates, and its lowest level since the first quarter of 2009.  4/13

Regulatory

-The Justice Dept. is bringing a civil suit against Apple, and five of the country’s largest publishers alleging they colluded to raise e-book prices.  4/12

Corproate 

-Sony announced it would cut 10,000 jobs in an effort to restructure.  4/10

-AOL will sell and license a collection of its patents for $1.1 billion to Microsoft.  4/10

-Facebook announced it will buy Instagram, a photo sharing application, for $ 1billion.  It’s the largest deal Facebook has made to date.  Instagram was founded in October 2010 and has ten employees. 4/10

-Best Buy’s CEO resigned over concerns he had an inappropriate relationship with an employee adding to the problems of the electronics store.  4/11

-Alcoa kicked off earnings season announcing a decline in profit of 69% on lower aluminum prices, but their numbers beat analysts’ forecasts of a loss.  4/11

-Johnson and Johnson was ordered to pay $1.2 billion as a penalty after a jury found that the firm violated consumer protection laws while marketing a drug.   4/12

-Nokia issued a profit warning as competitors took market share in emerging markets and a technology glitch has hurt its cause as it attempts to gain a foothold in the USD smart phone market.  4/12

-Banesto, the first major Spanish bank to release earnings, posted a 88% drop in earnings on the need to raise reserves in order to comply with new snappish banking rules.  4/13

-Google announced a first quarter profit of 61%.  In addition, it said it would complete a 2-for-1 stock split, but founders Serge Brin and Larry page would maintain their controlling voting rights.  4/13

-J.P. Morgan and Wells Fargo released earnings that beat analyst estimates however it was primarily driven by the firms reserving fewer funds for future losses.  4/14

Market

-The market continued its fall on the first trading day since the announcement of the weak jobs report.  The Dow fell 1%, the S&P dropped 1.1% and Japan dropped 1.5%. The 10 year Treasury yield declined back to 2.035%, a level last seen in early March.  4/10

-Concerns about Europe, and specifically Spain, continued to weigh on world markets a long with recent signs of weakness in the US economy.  The S&P fell 1.7%. The Dow sank 1.7%, its largest drop of the year.  Italian stocks dropped 5% and Spanish stocks fell to their lowest level since March 2009.  Overall Europe fell 2.5%.  Investors fled stocks for the safety of fixed income as the 10 year treasury dropped sharply below to 2% level to 1.988%, the lowest it had been since early March.  4/11

-Stock markets bounced back after the previous day’s losses on strong corporate earnings news and easing in European sovereign borrowing rates. The S&P 500, Dow, and Europe all gained 0.7%. 4/12

-Oil supply increases from Saudi Arabia are reducing the expected impact of sanctions against Iran on oil prices.  4/13

-World markets continued to rebound with the Dow up 1.4%, the S&P up 1.4%, and Europe gaining 1.2%.  4/13

-Spanish banks increased their borrowing from the ECB in March, showing that investors have left the country’s banks to rely on ECB funding.  4/14

-Stocks had their worst week of the year on concerns over Spanish debt, and slowing growth in China. The Dow fell 1.1% for the day and 1.6% for the week, while the S&P 500 dropped 1.3% for the day and 2% for the week.  Europe fell 2.2% for the week.  The 10 year Treasury yield remains under 2% at 1.996%.  4/14

There is no guarantee that any investment strategy, including those described here, will be successful. Any investment or investment strategy can lose money. Past performance does not guarantee or predict future results. You should not assume that any discussion or information contained in this newsletter serves as the receipt of, or as a substitute for, personalized investment advice from Raffa Wealth Management, LLC. This information was gathered from reliable sources but we cannot guarantee accuracy. Indexes do not reflect the fees associated with actual investments and such fees would reduce the performance illustrated.
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