Financial News 5/6/12 – 5/12/12

Economy

-Consumer credit surged in March up 10.2%.  It was the largest jump in borrowing in more than 10 years. 5/8

-Jobless claims dropped for the week beating expectations, and the 4 week moving average fell to 379,000.  5/11

-Spain is requiring banks to set aside $38.8 billion to meet potential loan losses and quicken the sale of troubled assets.  5/12

-China’s growth slowed in April, resulting in analysts dropping GDP expectations for the quarter and increasingly the likely hood that Chinese officials implement stimulus measures.  5/12

-Wholesale prices in the U.S. fell for the first time in 2012 dropping 0.2%.  The fall was a result of reduced energy prices.  5/12

Corporate

-HSBC’s profit rose 25% in the first quarter excluding onetime charges on its investment banking and emerging markets operations, but its costs remain high. 5/9

-Disney’s fiscal second quarter saw earnings gains of 21% led by its theme parks and cable channels offsetting weakness in its movie division.  5/9

-News Corp earnings rose 47% due to growth from its cable networks.  5/10

-Cisco’s earnings gained 20%, but had a cautious outlook. 5/10

-Fannie Mae had a $2.7 billion profit for the quarter, its best quarter since it was bailed out nearly 4 years ago, and will be repaying $2.8 billion it owes the government. 5/10

-Spain announced it will take a stake in troubled Spanish bank Bankia SA to rescue the weak bank.  5/10

-J.P. Morgan admitted to a $2 billion trading loss as a result of a complex trade of its own capital that depended upon a continued economic recovery.  5/11

Market

-Gas price continue to fall and are down for the 5th straight week.  The average price for a gallon is down to $3.79 from $3.94 at the beginning of April. 5/8

-The U.S. Stock market showed little concern over the election results in France and Greece with the S&P 500 up 0.04%.  Both countries saw changes in top leaders which are not as friendly to the austerity cuts the countries have undertaken to fight their sovereign debt issues. 5/8

-The price of oil has continued to fall as it dropped to $97.01 a barrel on Tuesday.  It is down $9 for the month.  5/9

-Markets continued to fall as jitters over Europe, and specifically Greece’s change in government, were more pronounced.  The Dow dropped for the 5th straight day falling 0.6% and the S&P fell 0.4% to 1363.7, its lowest close in close to a month.  European markets fell more abruptly with concerns the Greece may reject the austerity plan that had been developed for them.  Europe as a whole fell 1.7%. 5/9

-U.S. markets continued to fall as worries over Greece and Spain weighed on markets.  The Dow fell 0.8%, the S&P fell 0.7%.  Europe as a whole hit its lowest level in three months and Spain’s stock market reached an 8 and a half year low.  In response to growing global concerns a 10 year U.S. treasury auction resulted in the lowest yield on record of 1.855% and in the secondary market the 10 year U.S. Treasury yield dropped to 1.835% a three month low.  5/10

-Europe agreed to release a portion of a bailout payment to Greece, but held back $1.3 billion as a warning to the country to get its government in order.  5/10

-On European concerns and the trading loss for J.P. Morgan U.S. markets had a down week.  The Dow has its worst week in 5 months falling 1.7%. The S&P 500 fell 1.1% for the week.  Internationally, Japan was down 4.6% and Europe fell 0.4%.  Commodities continued to retreat with Oil falling 1% to $96.123 a barrel and gold dropped to $1,583.60 a troy ounce.  The 10 year rallied over the course of the week finishing at 1.841%.  5/12

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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