Financial News 5/13/12 – 5/19/12

Economy

-Euro-zone industrial production dropped 0.3% in March surprising analysts and increasing the likelihood that the region had entered recession.  5/15

-Retail sales were up 0.1% in April and year over year sales fell to 6.4%, the lowest level in more than a year.  5/16

-The CPI-U was flat between March and April ending three straight months of increases.  The current rate of inflation is 2.3%, the lowest level since February 2011.  The lack of an increase in April was driven by the fall in gas prices.  5/16

-The Euro-zone barely avoided recession in the first quarter as German growth outweighed falling growth in Italy and Spain.  The Euro zone’s GDP was flat in the first quarter.  5/16

-Industrial production rose 1.1% in April over March and manufacturing rose 0.6% after falling in March. 5/17

-Japan’s GDP jumped 4.1% in the first quarter driven by government spending at the country recovers from the tsunami disaster last year.  The result was stronger than expected.  5/17

-Mortgage delinquencies have dropped to their lowest level since 2008. 5/17

-New home starts rose a higher than expected 2.6% in April. 5/17

-The Conference Board’s index of leading economic indicators fell 0.1% in April after rising 0.3% in march.  The drop was attributed to increasing jobless claims and a decline in housing permits.  5/18

Corporate

-Yahoo’s CEO, Scott Thompson, was forced to resign over his résumé that was in a regulatory filing, which included a degree he did not earn.  5/14

-Groupon’s earnings improved with a smaller loss and an operating profit for the first time in two years.  The daily deals site’s revenue jumped 89%, but the pace trails its early rate. 5/15

-BestBuy’s founder will step down as chairman of the board after he failed to alert the board of a relationship the CEO was having with a subordinate.  5/15

-Moody’s lowered the credit rating of 26 Italian banks. 5/15

-J.P. Morgan announced the retirement of Ina Drew, who helmed the risk management unit behind the recent $2 billion plus trading loss. 5/15

-J.C. Penney reported a $163 million loss, double what was expected, said it would suspend its dividend and would not meet its prior earnings guidance.  5/16

-GM announced it plans to stop advertising on Facebook questioning the benefits.  5/16

-Wal-Mart’s first quarter profit rose 10% on improving sales in the U.S. and abroad.  5/18

-HP announced plan to cut between 25,000 and 30,000 jobs. 5/18

-Facebook priced shares for its IPO at $38 resulting in a valuation of the company at $104 billion when it begins trading.  5/18

-Facebook struggled out of the gates on its first day of trading.  Underwriters struggled to keep the price of the stock above its offering price of $38.  The stock finished up 23 cents or 0.6%.  It was the highest traded IPO of all time and was best by trading glitches on the NASDAQ.  5/19

Market

-Global markets continued their slide as investors feared the potential fallout from a Greek exit from the Euro.  Spanish yields soared to levels last seen in the panic last November.  The Spanish stock market dropped 2.7% as well.  Italy saw its market drop 2.7% as well and the Euro fell to $1.284, its lowest level in four months.  Europe was down 1.8% on the whole.  The S&P 500 fell 1.1% and the Dow dropped 1.0%.  5/15

-Global markets continued to head south over increasing concerns Greece will leave the euro-zone.  The S&P fell 0.6%, the Dow dropped 0.5%, Europe fell 0.7%, and Japan was down 0.8%.  Oil fell 0.8% to $93.98 a barrel.  5/16

-Weak economic news in the U.S. and rumors of a bank run in Spain led to global equity markets falling, and a rise in fixed income.  The yield on the 10 year treasury reached 1.702% setting an all time closing low.  The S&P 500 fell 1.5% and the Dow dropped 1.2% for their lowest levels since early January.  The Russell 2000 fell 2.3%.  Internationally, Europe was down 1.1%, but Japan was up 0.9%.  5/18

-World markets had their worst week of the year over continued concerns over Europe’s sovereign debt and banking crisis and the pace of global growth.  The S&P 500 fell 4.2% for the week reaching its lowest level since mid January.  The Dow fell 0.6% its 6th losing day in a row and its 12 drop in 13 days and fell 3.5% for the week.  The FTSE fell 5.5%, and Spain dropped 6.1%.  Overall, Europe dropped 5.2%, and Japan slide 3.8%.  Oil fell to $91.48 a barrel its lowest close since October.  5/19

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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