In The News:
Upgrade, Please.. S&P revised its outlook for US Sovereign debt from negative to stable siting a receding of fiscal risks. Presently, the US ratings is AA+. [Continue reading...]
Upgrade, Please.. S&P revised its outlook for US Sovereign debt from negative to stable siting a receding of fiscal risks. Presently, the US ratings is AA+. [Continue reading...]
Unchanged with a hint included: The European Central Bank (aka ECB) left its benchmark interest rates unchanged today and refrained from any new measures to stimulate a shrinking euro-zone economy. The big story however, was the hint heard around the world. The central bank, who has been reluctant to implement measures to revive the economy and employment of the Eurozone, would now consider cutting interest rates if the region continues stagnant economic growth. This is the first clear-cut signal of potential rate cuts out of the mouth of the big banker in forever.
Let the QE Game begin: Bank of Japan finally made it official; we are joining the QE bandwagon on Thursday. The BOJ (Bank of Japan) delivered its plan to help spur the Japanese economy, a plan that is so aggressive in nature it caught the world by surprise. The Central Bank announced as part of its plan it will double its holdings of government bonds and the amount of yen in circulation. The object of the game like all QE is to punch down long-term interest rates (like the 10 year treasury) which will spur consumers and business to borrow, spend, and invest more. Can we say start the printers, Danno.
Home is where Facebook is… Facebook unveiled Thursday its newest adventure, Home. Home is software, created for Android devices that will take over the phone’s traditional display with populate posts, pictures, and messages from the user’s news feed. All news smartphones from HTC will come with Home pre-installed and will be available to everyone else April 12.
Used bulldozer? Think Recycling… Caterpillar Inc. recently bought a minority stake in Cat Action Services, a venture started by a group of independent Cat dealers, who action off machinery that has been used for rental or trade in’s they could not sell on their lots. Caterpillar sees it as an opportunity to expand its sales of replacement parts, warranty, insurance and customer financial. Can we say Full circle thinking…?
HP Quitter… HP Chairman, Ray Lane, has called it quits and resigned after he faced fierce criticism; from both investors and shareholder advisory firm ISS, over his role in the debacle involving Autonomy. Lane will remain on with HP as a director.
In The Markets:
Asia: Two of the three main Asian markets closed mixed as China’s markets were closed Friday. The picture was a good one with both the Hang Seng and the Nikkei in the green however, the closer to the end of the trading day and technically closure to the US jobless claim number the worse the markets became.
Europe: European markets dropped on comments from the ECB’s Draghi that the Eurozone was still at risk for a deeper recession.
US: US markets rallied higher as investor choose to look at the positive: new QE in China not the negative: a rise in the weekly jobless claims.
Dow: +55.76 14606.11 Nasdaq: +6.38 3224.98 S&P: +6.29 1559.98
In Dinner or Drink:
Today we choose drink in celebration in Caterpillar recycling gig we will be drinking…
35 ml vodka
35 ml peach Snaps
35 ml white rum
350 ml orange alco pop
Pure orange juice
Add all three spirits into the mixer, then pour in the contents of the Orange alco-pop, finally add as much Pure Orange as desired & shake vigorously. Serve into a pint sized glass, add straws & enjoy!
Who wants Hulu??? Obviously DirecTV and two other unidentified suitors since all three have reportedly submitted bids of $1 billion plus each for the company. Seven other companies have also submitted bids the streaming content provider. Current owners News Corp, Disney, and Comcast have let it slip that they will be cutting down to a “shortlist” over the next few weeks.
Better but not quite great.. What some may say about the latest EZ PMI Numbers reported on Monday. Euro zone manufacturing PMI (Producers Manufacturing Index, a measure of manufacturing strength) came in at 48.3 for May vs. 46.7 in April. The rise was a 15 month high but any number below 50 still shows an economy in contraction. There’s always next month…
Goin it Alone: Apple will head to court solo and fight allegations it conspired with five publishers to raise e-book prices. The five publishers decided to settle with the Justice Department pre-trial. Guess we will all have to stay tuned to see which side was smarter.
Shame on you.. French prosecutors have launched an investigation into the French arm of wirehouse UBS. The prosecutors are probing whether the unit’s parent company bankers encouraged (aka helped) French clients open Swiss Bank accounts allowing them to commit tax evasion.
Settlement, Maybe.. Bank of America heads to court on Monday. At stake, whether the court will approve the proposed $8.5 billion to settle claims over bad mortgage bonds. If the settlement were to be agreed Bank of America can move toward their ultimate goal of cleaning the inherited Countrywide mess up. One hurdle standing in the way… AIG opposition of the deal, saying the bank in fact owes them $8.5 Billion in damages. Luv court room drama.
Mixed Bag: Friday brought a mixed bag of economic data out of the US. On the not so good side Consumer spending was down in 0.2% in April, the first decline since May 2012. On the good/better side of the bag Chicago PMI (Producers Manufacturing Index) was up in May to 58.7 a jump from May 49.0. Also, Consumer Sentiment rocked at 84.5 in May vs. 76.4 in April. But why is this bad? Better economic data=Better economy=sooner end of QE, Weak economic data=Bad economy= QE (Quanatative Easing) not ending in the near future.
Asia: Asian markets tumbled in their Monday session. It was the fourth major fall in eight sessions. Global optimism over Abenomics is starting to fade on concerns that his three arrows will fall short of expectation and not getting the job done. The Nikkei has not wiped out 17% of its value since its rally in midNovember 2012 which brought gains of 80%.
Europe: European markets closed deep in red territory on Friday. Investors took profits on the final day of the month while starting to worry what the future will be like if the Fed stimulus program starts to taper off because of the US growing economy.
US: US markets followed Europe’s footsteps tumbling Friday on better than expected economic data. Investors got a lot more squeamish thinking about how soon the fed might start tapering off as the economic is looking better
DJIA: -208.96 15,115.57 NASDAQ: -32.38 3455.91 S&P: -23.67 1630.74
We pick a drink today that global investors may have been drinking after Friday’s tumble.
Harvey Wall Banger
Pour the Vodka, Galiano, and orange juice in to a shaker with ice and shake until well mixed. Then strain in to an appropriately sized glass filled with ice and serve.
For more info on our drink today.
Fuzzy math: China released data that have some claiming fuzzy math. For the three months through February China’s mainland customs reports $ 94.9 billion in exports to Hong Kong, however, Hong Kong reported only $58.7 Billion in exports. The discrepancy between the two reports was the greatest reported ever. The exact reasons for the discrepancy aren’t clear however, many economist believe it may be China’s system of controls which make it hard to move investment funds in and out of the country. It is common practice for companies or peeps in China to hike the value of their goods and sending them abroad allowing the money to come back into China in greater amounts.
Samsung Store: Best Buy has discovered a way to use empty space in its stores: Turn it over to Samsung. Beginning May 1 Best Buy’s big box stores will have mini Samsung boutiques located toward the front of the store. The boutiques will carry an array of Samsung’s mobile devices, camera, and accessories while be manned by recruits hand-picked and trained by Samsung.
No good news on the EZ home front: EZ PMI (Producers Manufacturing Index) dropped in March positing 46.5 vs. 47.9 in February. What does it all mean.. The slowdown has now hit the one source of bring light, Germany.
Phone Home: Facebook is set to unveil its new HTC-made phone Thursday. The phone will run on an Android operations system and incorporate Facebook functionality. Some of the perks include news feeds made for mobile and a new scroll that helps users find information based on their network.
Same ol’ Same ol’ - BOE (aka Bank of England) announced it will leave its monetary policy unchanged, its benchmark rate at 0.5%, and its QE program dormant. The decision came after the country’s service PMI (Producers Manufacturing Index) rose from 51.8 in February to 52.4 in March the highest in seven months.
Not so good Economic Data: First, came the ADP numbers (number of jobs the private sector alone added) reporting only 119K jobs vs. 192K expected. Second, ISM (Institute of Supply Manufacturing) Index down at 54.4 in March vs. February 56… The index showed weakest in the manufacturing sector in 7 months.
Asia: Asian markets were mixed in their trading session as the Bank of Japan said it would double its asset purchase insuring it will hit its 2% inflation target in two years.
Europe: European markets slid as investor anxiously waiting news from BOJ and BOE about their monetary policy.
US: US markets slid on weak economic data and rising tension with North Korea. Dow: -111.66 14550.35 Nasdaq: -36.26 3218.60 S&P -16.56 1553.69
Dinner or Drink:
Today we pick a drink worthy of China’s fuzzy math.. A fuzzy navel.
1 part peach schnapps
1 part orange juice
1 part lemonade
Mix equal parts of each ingredient in a highball glass, top with ice, and serve.
More awesome drink receipes click here.
Jumpin Factory Orders… Activity in US factories jumped in February to 3% vs. 1% in January. A rush of orders for planes and defense before sequester, accounted for the increase causing many to think the jump is unsustainable.
Falling Activity…The Eurozone manufacturing sector fell in March to 46.8, the lowest level since December. The below 50 reading indicate, the Eurozone as a whole, is contracting and sliding deeper into recession. This is just the latest in a string of bad economic news for the Eurozone, causing some leaders to put additional pressure on the ECB (European Central Bank) to help figure out a way to get things moving in a better direction.
I’m Done… Cyprus Finance Minister, Michael Sarris, quit Tuesday after meeting with IMF (International Monetary Fund) and EU (European Union) leaders and securing a 10 billion euro bailout deal. The bailout deal will cause Cyprus depositors to lose parts of their deposits and slash its banking sector. Speculation for the departure, Sarris would have come under major scrutiny for his role in the crisis. He’s reasoning he had completed his task.
Twitter anyone.. SEC (Securities and Exchange Commission) has opened the door for public companies to use social media to get the word out. On Tuesday, the SEC announced postings to social media sites such as Twitter or Facebook are as good as news releases or company websites for spreading company news to investors. The only catch companies must let peeps know which outlets they intend to use
Fannie Mae is having better days.. The behemoth mortgage lender, who needed a government bailout in a big way during the financial crisis, reported Tuesday its largest annual profit ever. 2012 brought a net income of $17.2 billion however, due to conditions set forth in the government bailout deal the company can only keep a small percentage of it profits handing the government over a huge chunk.
We have a buyer.. The Nasdaq OMX group (yes, that Nasdaq) is buying it’s self a new trading platform called eSpeed for $750 million in cash. eSpeed, a platform used to trade treasuries, will help Nasdaq break into the fixed income market. The purchase should help NASDAQ whose profits have been cut by lower trading volume in the last several years.
99 problems but getting clients ain’t one.. Rapper Jay-Z has officially thrown his hat into the sports agent ring signing his first high profile client, Robinson Cano of the NY Yankees.
Asia: Asian markets were mixed in their early morning trading sessions. Investors were keeping a close eye on the BOJ new governor while digesting China’s better PMI (Purchasing Manufacturing Index) report.
Europe: European shares rallied as investors liked the news out of Cyprus that it’s creditors have given an extra year for the country to meet it’s budget expectations and new hope for increase Merger activity as a potential takeover of Vodafone was announced.
US: US Markets rallied on better than expected economic data from new car sales and increase factory orders.
DJIA: +89.16 14622.01 NASDAQ: +15.69 3254.86 S&P +8.08 1570.25
Today we pick a drink to celebrate one of my favorite baseball players Robinson Cano and his new partnership with Jay-Z.
New York Cocktail
Here’s what you will need:
2 oz Canadian whisky
3/4 oz lime juice
1/2 oz sugar syrup
1 tsp grenadine syrup
Shake and strain into an old-fashioned glass three-quarters filled with broken ice. Garnish with a twist of orange.
Slow and Steady: Monday’s ISM (Institute for Supply Management) showed the US economy grew for a fourth straight month; however the numbers did show the economy grew at a slower rate than expected.
Shut Out: Commodities, who suffered their worst quarter since 2010, were shut out of the euphoria felt by the financial markets in Q1. In the past commodities and the direction of the US stock markets have gone hand in hand since the financial crisis of ’08. Investors and analyst suggest the large inventories or stockpiles of basic goods such as oil, corn, or cotton has led prices to remain low in Q1.
Apple Apology: Apple posted an apology letter to its China’s website. The letter written in Chinese and signed by Apple CEO, Tim Cook, apologized for misunderstandings created by poor communications regarding warranty policies.
Contraction: Eurozone PMI (Producers Manufacturing Index) dropped to 46.8, a three month low, in March vs. 47.9 in February. Contributing to the drop in monthly readings, a fall in output and new orders, bringing further job losses to the region.
Cleared for Bankruptcy: A federal judge has cleared the way for Stockton, California to continue with its bankruptcy, finding citing the city is eligible. The judge also allowed the city to keep its pensions intact while imposing losses instead to its Bondholders. Several municipalities such as Jefferson County, Alabama and San Bernardino, California have been keeping a close eye, as many feel the ruling has now set a precedent in municipality bankruptcies.
Asia: Asian Markets were mixed as investors reacted to the possibility of slower growth in the US.
Europe: European markets were closed for Easter.
US: US markets were mixed on the first day of the month and the quarter on slower growth economic data.
DJIA: +5.69 14572.85 S&P: -7.02 1562.17 Nasdaq: -28.35 3239.17
Dinner or Drink:
Today we pick dinner. In honor of Stockton, CA home of the annual Asparagus Festival we will be feasting tonight on…
Here’s what you will need:
Cook the asparagus in a large pot of boiling salted water until crisp tender, about 2 to 3 minutes. With a spider or slotted spoon, remove asparagus from boiling water to a bowl of ice water to cool and stop the cooking. When cool, strain, cut asparagus into 1-inch pieces, and set aside.
Return the water in the pot to a boil, adding additional water, if necessary. Add the pasta and cook until al dente, tender but still firm to the bite, about 8 minutes. Drain the pasta, reserving 1 cup of the cooking liquid.
Heat the oil in a heavy large skillet over medium heat. Add the garlic and sauté until fragrant, about 20 seconds. Add asparagus to the skillet. Season with salt and pepper, to taste. Add the pasta, and if needed, some of the reserved cooking liquid. Toss to coat. Add the prosciutto, mozzarella, and basil, and toss to combine. Turn off the heat. Season with salt and pepper, to taste, and serve.
Thank you Food Channel.com for the excellent recipe.
Buffet’s Grabbin Goldman.. Warren Buffet’s Berkshire Hathaway grabbed a bigger stake in Goldman Sahs (aka Goldman Socks) in exchange for letting go of his option, granted to him when he floated a loan to the company in 2008, to buy shares later at a below market costs later. Leave it to Buffet to masterfully create a new arrangement with Goldman where he can receive shares without deploying a dime to buy them. Don’t be fooled it was a win win for both parties. Warren got a bigger piece of the pie and Goldman got a huge boast to its reputation.
Bric Bank: The BRIC’s (Brazil, Russia, India, and China) are exploring establishing their own new development bank much like the IMF (International Monetary Fund) with a sharper focus on the nations involved. Capital plans have already been established with several different options along with a cap on counties contributions.
Ford Opposition: Ford’s CE ,Alan Mulally, oppose Japan’s entry into free trade talks with the United States. What will change his mind..? The Japanese to open its markets to more U.S. cars and measures to strengthen the yen. American Pride Baby!
Mixed Bag of Data: Economic reports out Tuesday failed to provide any clear direction how the economy is really doing. February Durable Goods Orders (Orders for goods that do not wear out quickly or have a lifespan of more than three years. Things like cars, planes, and computers) and S&P Case-Shiller home-price index were better than expected, but new-home sales for February and consumer confidence for March fell shy of estimates.
You’ve been slapped: The Federal Reserve slapped Citigroup’s hand with a consent order demanding the bank clean up their anti-money laundering procedure. The consent order, which followed similar orders last year from the Office of the Comptroller of the Currency and the FDIC, told Citigroup they failed to comply fully with the Bank Secrecy Act. The Act requires Banks to report suspicious actives. Citigroup has 60 days to submit a written plan detailing enhancements in compliance related to anti money laundering. Citibank is not alone in getting slapped; JPMorgan received the same order for the same issue in Jan.
Sharing Seeds: DuPont has agreed to pay Monsanto $1.75 billion as part of licensing agreement between the two companies. The new licensing agreement allows DuPont to sell genetically modified seed technology for corn and soybeans. The agreement puts aside the $ 1 Billion jury awarded to Monsanto for DuPont’s infringing on Monsanto’s patients.
Asia: Following in the footsteps of the US, Markets in Asia were higher, with both the Japanese Nikkei and Shanghai Composite up 0.2 percent.
Europe: European markets rose Tuesday as investor took the encouraging data from the US as an excuse to take profits.
US: US markets continued their winning ways on Tuesday with the Dow closing in triple digits having its biggest gain in nearly three weeks. Investors took the mixed bag of economic data threw the bad out and kept the good.
DJIA: +111.90 14559.65 Nasdaq: +17.18 3252.48 S&P +12.08 15693.77
Today we pick a drink to celebrate the Buffet/Goldman deal. One of my personal favorites…
Measure 1/4 cup of Whiskey in a graduated cylinder and pour into a glass carafe. Repeat with 2 tsp. of red vermouth. Add a few drops of angostura and ice cubes. Mix everything together with a long handle spoon. Pour into cup holding the ice back with the spoon.
New Deal. Cyprus finally got an official deal over the weekend. The deal consists of:
Because of the new deal the country will now need to impose stricter financial controls, possibly cutting off its citizens and companies from much of the rest of the euro zone.
Your Our Man… JPMorgan’s board endorsed Jaime Dimon too remains as both CEO and Chairman of the board citied JPM’s consistent and outstanding performance under Dimon guidance. Some critics had called for a split between CEO and Chairman of the Board after the London whale tubal.
New Crackberry On The Block.. Blackberry Z10 went on sale Friday. If you’re an ATT customer you can buy it for 199 clams.
New Apples.. Apple announced it will unveil its new iPhone and iPad 5 at its annual headquarter event on June 29. June 29th marks the 6th anniversary of the iPhone.
What No Bach?..Musicians from the San Francisco Symphony went on strike March 14 and the strike is still on. San Fran becomes the latest in a long list of labor disputes at US orchestras that have been hard hit by audience shifts in the aftermath of the financial crisis.
Welcome To The Family.. Apple Inc. announced it has acquired indoor GPS Company, WifiSLAM, for approximately $20 million. The newest member of the Apple family could help the company catch up to its rival Google, by providing cell phone GPS to work indoors thus giving the user the ability to access indoor maps of their location. Currently, Google maps does this for ‘Droid users however, the service has been unavailable to iPhones until now.
No confidence… The IFO German Business Confidence declined unexpectedly in March to 106.7 from 107.4 in February. It was the first time the index has declined in five months. Why is this important… Germany is still the savior and leader of the Eurozone. A strong Germany economy gives investors hope the Eurozone one day will find its way out of crisis. Peeps start to panic anytime there is any type of ding in the armor of Germany.
Asia: Asian markets were mixed Monday as news spread of the EU and Cyprus negotiated a last-minute deal Sunday night securing the countries solvency for now.
Europe: European markets closed lower Friday as the world at large hold’s it collective Breath while the Cyprus Parliament votes on the latest bailout deal. The ECB made it clear to Cyprus this is your last chance to get your act together promising to pull the funding deal if the Parliament could not come to a comprise and vote in favor of the deal.
US: US markets closed mostly higher Friday on stronger corporate earnings and fears about the Cyrus drama begin to melt. DJIA +90.54 14512.03 S&P 500 +3.18, NASDAQ +22.40 3245.00
We choose drink. A nice Grand Apple in celebration of Apple’s new additions.
Stir ingredients in a cocktail shaker with ice. Strain into an old-fashioned glass. Garnish with a twist of lemon.
Special Thinking to Drinkmixer.com for the excellent drink recipe.
Overnight Mail..FedEx reported its quarterly profit plunged 31%. It seems international customers and shippers are not in need of overnight instead they are opting instead for slower and cheaper delivery options. The news sent the stock down 6.9% on Wednesday.
Fuzzy Face Press Conference- It’s time for FED President, Ben Bernanke (aka fuzzy face) to hold his quarterly press conference. Here’s what we decoded.
Heads in the clouds… Oracle reported lower than expected Q4 earnings. The company eps (earnings per share) was 0.65 vs. the expected 0.66. The loss was attributed to more consumers and companies choosing cloud base systems vs. the old in house router and server method.
Jetting in a G-6.. Several JCPenny higher-ups are hopping private jets owned by JCPenny to make the commute to Texas every week. The planes pick the execs. on Monday shuttling them to Plano, Texas and picking them up on Thursday for the return trip back to their homes. Hmm I wonder if they wearing attire bought from JCPenny as they jet around?
Europe: European stocks posted gains in their Wednesday trading session, bouncing back from two consecutive days of losses. Despite a sea of green, investors continued to keep at least one eye on the developments in Cyprus.
US: US markets closed in the green on news the Fed. will keep their foot on the gas petal and QE will continue.
DJIA +55.91 14511.73, Nasdaq +25.09 3254.19 S&P 500 +10.37 1558.71
We choose a drink to be enjoyed by JCPenny’s execs as the jet around the country.
Texas Pink Cloud
Pour all ingredients into a blender, add 3 – 4 cups of ice and blend until all ice is chopped fine. Should be the consistentency of a daiquiri or colada. Pour into a pitcher ready to serve.
Before 24.. Global Financial News you can use..
Who: Asian Markets
What: Nikkei +215.96 11,369.12 Most Asian Markets were closed today for the Chinese New Year celebration.
But Why? Despite being one of the only Asia Markets open today, the Nikkei added to its recent rally. Exports again led the rally as the Yen continues to weaken against the US Dollar. Comments from prospective Bank of Japan Governor Haruhiko Kuroda saying he is open to further easing this year caused the Yen to weaken against both the US Dollar and Euro.
OH No you didn’t.. North Korea has confirmed they tested a nuclear missile early this morning.
Who: European markets
What:Euro Stoxx 500 -7.69 2622.61
But Why? European markets closed in the red on Monday as investors took profits, a major European drug company coped with rejection and worries about what drama was going on in the Euro zone Finance Meeting.
Sorry Charlie, no better living through chemistry for you..Novo Nordisk share plunged 13 percent Monday. The shares took their worst fall in four years on the announcement its new insulin drug will be required to supply additional test before U.S. regulators will give their stamp of approval. The potential approval process could last several years and threaten the company’s long-term financial picture.
Shall we dance, Cyprus.. One of the many topics on the agenda of euro-zone finance ministers, currently meeting in Brussels, a proposal for an aid package for Cyprus. Making this a bit more tricky Cyprus has a large exposure to Greece’s banking and financial sectors. Despite the risk, Eurogroup Chief Jeroen Dijsselbloem, commented Monday work would continue towards drawing up an aid package. Stressing however, no final decisions would be happening until March after the country had their general elections.
Who: US Markets
What: Dow – 21.73 13971.24 Nasdaq -1.37 3192.00 S&P 500 15147.01 -0.92
But Why? US Markets lost some ground on Monday. Investors seemed to be hang out on the sidelines as they took some profits and anxiously waited for the President’s State of the Union. Investors and most Americans will be watching Tuesday as President Obama makes his state of the union address. Many are hoping the speech will provide hints how a budget deal may be reached and what his potential plans for future economic recovery will be.
Crackberry.. We’re going to have to give you up.. Home Depot announced today it would swap out 10,000 blackberry and replacing them with I-Phones.
You sold what?? Google’s Executive Chairman Eric Schmidt sold 42% of his share of Google recently. The sale could net him $2.5 billion. Wall Street had mixed reviews what this the Google big picture. One half believes Schmidt when he said he need the money for his next big adventure. The other half believe it doesn’t bode well for confidence in Google. It could have been worse if Google current CEO or other exec had sold their shares.
Before 24.. Financial News you can use.
Who: Asian Markets
What: Nikkei +416.83 Hang Seng +108.40 Shanghai +1.34
But Why:Asia markets closed in the green Wednesday morning. Leading the way the Nikkei (Japan), who jumped too a four-year high.A less expensive Yen helped propel export stocks as investors bet on the effects of a cheaper yen: better profits. The Shanghai (China) composite closed flat on lower volume as millions of Chinese get ready for the national week-long New Years celebration holiday next week. The Hang Seng (Hong Kong) added triple digits as the New Chinese leadership wants to narrow the gap between the have’s and the have not’s.
Really those pesky exchange rate places in the airport can cause a market move? Yes, they can. Because the Yen is less expensive than the Dollar right now Japan exporters are ridding high. Essentially it is cheaper to buy something made in Japan than most anywhere in the world. Investors are betting Japan’s corporations profits will rise.
It’s always political..Investors also are banking on Japan’s version of free money( also know as QE). Earlier this week an official with the Bank of Japan, Governer Massaaki Shirakawa, said he would resign in March earlier than end of his five-year term in April. Speculation for the cause of earlier retirement.. Prime Minister Shinzo Abe (Japan’s new sheriff) has put the central bank under relentless pressure to do more to pull the economy out of the doldrums aka. monetary easing. Prime Minster Abe has made it clear that his pick for the Bank of Japan governor will help promote his mission of aggressive monetary easing to help stimulate Japan’s economy. Here’s to things that make you go hmmmmm.
Who: European Markets
What: Stoxx Europe 600 index rose 0.6% to 285.56
Sometime Bad news is really Good News? According to Markit’s January Composite PMI (Purchasing manufacturing Index) the Euro Zone activity shrunk at a rate smaller than it had in the previous 10 months. The Index was helped by a steady increase in growth from Germany. The index also measured the Euro zones services sector which rose to 48.6 in January from 47.2 in December. (Any figure below 50 indicate contraction. Figures over 50 indicate expansion) This gave the markets and investors a reason to dream of the good old days of the past when the Euro zone was thriving.
It’s a small world after all.. Also adding to the dream machine news from the U.S and China show the world’s economic picture is improving. In the US data released in the am stated non-manufacturing sector remained in expansion territory last month while beating forecasts. China economic data, the HSBC China Services Purchasing Managers’ Index, rose to 54.0 in January from 51.7 in December.
But wait.. Lurking in the shadows: The Euro zone debt crisis soap opera. With a political scandal in Spain and a banking scandal in Italy spooked investors to avoid bonds and stocks in Europe’s southern countries. Money moved out of weak country bonds like Spain and Italy into more secure countries like Germany. European Finance ministers are meeting this week. ECB Chief Banker Mario Draghi is still trying to convince the world the Euro zone is making a speed recovery from the depths of financial ruins.
What does this mean? The European markets aren’t buying what the ECB is handing out. I smell nervous investors coming soon.
WHAT: DJIA: +99.22 13979.30 Nasdaq: +40.41 3171.58 S&P:+15.58 1511.29
But Why: US stocks rallied across the board on better than expected economic data, new deals, and increase in profits.
Nothing makes you smile more that economic data… The US service sector expanded in January and on the hou frsingont prices hit a 6 year high.
Show me the money.. Technology stocks led the rally across all 10 sector groups. The largest rally in tech came from Computer Sciences who jumped $3.84 a share after better than expected earnings. Why is this important? It shows companies are investing in their infrastructure aka they are investing in their future.
We have a deal: Those are the four best words in Micheal Dell’s world. After months of speculation Dell’s CEO confirmed he will be taken the tech giant private in a deal worth $24.4 Billion dollars. Financing for the deal came from fund affiliates of Silver Lake Partners, Microsoft and the big guy himself Micheal Dell.
Fraud? ..After four years of investigation the US Justice Department formally announced it will sue S&P for fraud over their mortgage ratings, which some belief contributed to the financial crisis. The Justice Department claims S&P inflated ratings on mortgage investments which in turn made it seem they were less risky and more attractive to investors large and small.
Backstory: S&P or ratings companies rate companies, bonds, or other investment vehicles. This rating acts like a Good Housekeeping seal of approval. The ratings are supposed to tell investors if the investment vehicle is safe or risky helping the investor determine if it is suitable for their investment dollars. S&P is charged with inflating ratings so more companies would ask them to rate future investment vehicles therefore making them more moolah. If your memory is sharp you may be asking: wasn’t S&P one of the first ratings agency to downgrade the US government ratings? Yes you would be correct, causing some on wall street to say paybacks are hell and Karma will eventually catch up to you.
The Before 24.. Global Market News for your next 24.
Asian markets closed mostly positive in their early Monday trading session on news that China’s Premier Wen Jiabo commented that policy easing supporting growth in the country could be the near future. The Shaghai rose 3.78 points and the Nikkei gained 22.58 points. The loser in the region the Hang Seng which was down 29.53 hurt by the losses in the European financials like HSBC and Standard Charter.
European stocks closed down for their worst week in almost eight months. The markets were under pressure from slowing growth in China and continued concern over the fiscal crisis in Europe. Bank stocks rose on Friday as talk of a European ban on short selling arose again after the Thursday downgrade of Spanish banks. A spanish news paper was quoted as saying Spanish Banks were going to ask the Country’s financial regulators to reinstate the ban. A spokesperson for the European Securities and Market association declined comment. Miners and other companies that are heavily exposed to China drove the market losses. Also aiding the down turn a government think tank said on Friday that annual growth could slow to 7.5% in the second quarter due to a curb in the property sector and global headwinds.
Europe started it’s Monday trading session on an up note, bouncing off five month lows, aided by the news from China of possible policy easing.
US stocks closed down for a 6th straight trading session as markets continue to feel the pressure of uncertainty in Europe. The Dow was down 73.11, the Nasdaq lost 34.90, and the S&P down 9.64.
The Facebook IPO was obviously the story of the day. Plagued with issue from the beginning the stock traded along a tight $38.00 range.
Oil prices dipped below $100.00 a barrel closing down $1.00 at $91.59. Oil was down last week by 4.6% suffering its third week of declines. Larger than expected volume of orders and confirmation of purchase to some institutional clients made for a bumpy first day of trading. Zyga the online game maker that uses Facebook technology also had a bumpy ride. Greater than normal trade volume caused the markets internal circuit breakers to shut down trading on several occasions.
Treasury yields were lower as the European Debt crisis caused investors run into safe havens to take shelter.
The Before 24… Global Market News for your next twenty-four…..
The View: Investors and markets become giddy at the idea QE3 may still be on the table for the US.
Spurred by Bernake’s comments most Asian markets followed both the European and US markets, climbing in their Tuesday morning trading. The Nikkei climbed 2.4% and the Hang Seng also added 1.8%. China’s Shanghai was the only market closing lower after government data showed the nation’s largest industrial groups were down 5.2% from last year.
European shares edged higher Monday. The rally was led by improved German business sentiment. The Ifo Buisness-climate index, a good bellweather of the Germany economy, rose to 109.8 for a fifth straight month. Also leading the rally comments made by Fed President Bernanke in a speech Monday saying future improvement in the labor market is dependent on further economic growth. The markets took this language as indication the Fed would start another round of quantitive easing.
US markets all closed in the green Tuesday on remarks from the Fed president. The Dow gained 160.90 points, the S&P added 19.40 poinsts, and the Nasdaq grew 54.65 points. The US market’s choose to ignore the weaker new home sales number instead keenly listening to Bernanke’s speech. Some analyst question what was and wasn’t said about QE3. Bernanke did mention and maintained his position on low-interest rates. He also stated the US needed more growth to bring down the unemployment rate and implied the US wasn’t quite there yet. He didn’t however say in explicit language QE3 was definitely coming down the pipeline. Investors and the markets seemed to have taken the language about growth being needed to help lower the unemployment rate as a que that QE3 could and would be used to stimulate the economy into growth mode. As with most things interpretation lies in the ear of the beholder and we will have to wait and see which camp is correct.
Commodities were mixed on Monday. Oil gained $0.17 and the WTI was up $0.21. Gold added $29.6o to close at $1692.00. In the food comodities Wheat and Soybeans lead an agricultural commodity rally. Soybeans were up as more ,asset managers are starting to increasing the buy soybean futures contracts (the contract that states the amount someone would buy soybeans at a specific time in the future) on continued fears Brazil’s crop will be smaller than expected. Wheat rallied on the same type of fear. This time it is fear that Europe’s crop will shrink due to a lack of rain in the region.
The 10 year closed at 2.25%. While the dollar lost some of its power on expectations the Fed will print more money with it starts up QE3 again.
The Before 24…
Global market news for your next twenty-four…
Good economic data and a reprieve from higher oil prices helped global markets rally.
Asian markets closed higher in their Tuesday trading session as oil prices recede slightly and investors look toward tomorrow and what news the LRTO will bring to the markets. The Nikkei was added 88.59 points hitting a 7 month closing high. The Shanghai added 4.79 on reports the Chinese government has softened it stand on local government funds. Now allowing banks to lend money to local governments to fund projects. The Hang Seng rallied 350 points as investors optimism soared with higher corporate earning.
European markets closed lower as the debate continued over the effects of the higher gas prices on the global economy and continued Greek debt issues. Not helping investors jitters comments from Germany Chancellor Angela Merkel saying there is no 100% guarantee a new Greece bailout package would succeed. Shortly after the close Germany’s parliament approved the Germany bailout plan despite Merkel losing part of her “majority” in the vote. Investors jitters increased as the LTRO ( the European version of the US tarp) edges closer. The last LTRO was held in December and caused risk appetite among investors to die off. Most analyst are predicting the results of this weeks action will give some investors the direction they may have been looking .
European markets traded slightly higher in their early Tuesday morning session as investors wait for the LTRO tomorrow. This despite the news late Monday that S&P has officially down Greece to selective default. investors and the global will have to wait to see if the ISDA, the official body who will decide if it really is a default and cause the CDS (Credit default Swap) to kick in.
The US markets closed mostly flat in their Monday trading session. The Dow closed down for a second day losing 1.44 points and again staying under the illusive 13K number. The trend of mid morning reversals continued. The US markets all opened down, including the DOW by triple digits rallying back only to rally throughout the session . A better than expected US housing reading and Dallas February manufacturing active grew faster than in January helped fuel the markets rally. The S&P rose 1.86 points while the Nasdaq notched it’s third straight day of gains adding 2.41 points.
The commodities picture was mixed on Monday. The WTI snapped it’s 7 day winning streak closing down. Meanwhile Gold saw a $3.10 gain. Food commodities were all higher Monday. Corn closed in the green despite strength in the dollar and a new “rumor” that the amount of corn acreage planted this spring may increase due to record prices in the last year. Soybeans closed higher for a 6 consecutive day and reached five-month highs. helped by projections of a smaller than expected crop from South America may cause additional export demand for the US. Wheat rode the rally wave Monday traded higher. Aided by short covering of positions and spillover of supply from it’s best friends corn and soybeans.
The Bond markets were slightly higher across the board as Euro worries and the effect higher gas prices will have on GDP (Gross Domestic Product).
The Before 24..
Global Market news for your next 24..
Global markets experienced a bit of New Year cheer choosing to absorb the positive and shrug off the negative.
Asian Markets railed in their Tuesday morning session on news of China’s better than expected PMI. China’s December PMI came in at 50.3 beating the 49.1 expected by analyst. The numbers showed a swing in manufacturing from contraction to light expansion. Also aiding the rally gains posted by the European markets on Monday. The Hang Seng rose 2.4% to 18877.41. The Nikkei and the Shanghai markets are closed for New Year holiday.
European markets rallied modestly on Friday ending 2011 on a high. Overall the European markets were negative as the sovereign debt crisis and all the jitters it caused have taken a toll on the equity markets.
European markets rallied on their first trading day of 2012. A better than expected purchasing managers index from Germany helped boost the European Stock markets into the green.
Europe was led by German stocks which rose after the counties manufacturing purchasing managers index rose to 48.1 in December from 47.9 in Germany providing investors a small glimmer of hope in the manufacturing sector. Bond yields for Europe largely stayed the same including Yields for Italy’s debt which were up two basis points to 6.88%.
Spanish stocks rose despite a warning from the government ton Friday that they would miss their budget deficit target by a winder margin then first anticipated.
European markets were mostly in the green in their early Tuesday morning trading despite the news that the Euro zone manufacturing PMI increased to 46.9 in December however it was still the fifth month of contraction. Instead the markets decided to focus on the German’s unemployment rate for December, which was came in at a record low.
The Euro still remains under pressure against the dollar holding around the 1.29 level.
US equity markets closed down on the final trading day of 2011. The Dow fell 69.48 points ending the year up 5.53% for the year. The S&P dropped 5.42 points close to flat for the year. The Nasdaq closed down on Friday losing 8.59 points and ending the year negative for the first year since 2008.
Commodities markets closed mostly higher on Friday. Gold rose $25.90 to end at $1566.80 while Oil fell $.82 to end the session at $98.83 a barrel.
Natural Gas prices on Friday closed at a two-year low as a warmer winter causes demands to plunge Food commodities closed out 2011 higher. Grains such as wheat, corn and soybeans were higher on a weaker dollar and continued dry weather in Argentina causing demand to strengthen.
Treasury yield were down on the last day of the year. The 10 year yield closed at 1.878% as investors still remain shaky which direction they think the market will go. Treasury holders over the last year saw a gain on their investment. The 10 year for example earned it’s holders a 17% return in 2011.
Investors still remain jittery and uncommitted to any rally
in global markets.
Asian markets ended sharply lower in Tuesday trading
sessions. Continued investors nervous about the Euro-zone debt crisis,
weakening economic numbers from China, and IBM ‘s earning report caused the
markets to tumble. The Nikkei lost 1.6%, Hang Seng tumbled 4.2% and Shanghai
Already jittery investors got several new reasons to become even more cautious of the markets. First, the same comments that rocked both the European and US markets took it toll on
Asia Tuesday. Comments on Monday from Merkel calling the idea of a comprehensive bailout plan a”Dream” dashed the euphoria investors were feeling toward the subject. The second, economic data
out of China showed GDP grew at a rate of 9.1%, which for most of the global
would have made us dance however, in China it was below expectations and
substantially lower than the 9.5% gained in the second quarter. This growth however was still strong enough to potential dampened any hopes that China would begin to loosen it’s
European shares declined in their Monday session after
comments from euro-zone officials put a damper on investor’s high hopes of a
speedy yet comprehensive bailout plan. Early gains were erased after German
Finance Minister Wolfgage Schaeuble commented the upcoming European Union
summit may not bring a solution to the euro-zone debt crisis. German Chancellor
Angela Merkel agreed calling the resolving of all the problems at the EU
summit was a dream. Harsh words after
the G-20 finance ministers of the weekend tried to reassure nervous investors
by calling for a complete plan that will help tackle the European debt crisis
be announced at the European Union summit next week. Except for a bit of
reassure to investors the G20 meeting failed to yield any significant progress
toward the Eurozone debt crisis. Also adding to fears of a stalling global economic
picture, data released this morning from the US showing a significant drop in
European stocks were bumpy in their early Tuesday trading. Causing
the decline China’s disappointing GDP numbers, UK reported inflation, and rumor of a potential downgrade of France’s covited triple AAA rating.
US Markets declined on Monday for their worst session in two
weeks, as the fuel that has fired the rally over the last two weeks is starting
to run out. The Dow plumpted 247.49 points, the S&P fell 23.72 points and
the Nadsaq lost 52.93 points. The Dow and Nasdaq are now both down 1% year to
date. The S&P is down 4.5% for the year.
The markets were in the red from the start with bleaker
economic reports caused investors to again feel jittery about the US economic picture.
The Empire State index, a gauge of the manufacturing sector, printed -8.5. The number was down for a fifth month in a row in October after a slight improvement from September.
The industrial production also reported this morning, rose 0.2% in
September on increase demand for cars and computers. Both reports show a
continued slowing of the US economy.
Also weighing on investors minds the second bank after JP
Morgan Chase, Wells Fargo, reported lack luster earnings. Wells reported, for the first time in two
years, disappointing Q3 quarterly results. Analyst and investors were caught
off guard as Wells was considered one of the least vulnerable banks to the
recession because of it’s low cost deposits and steady lending.
Treasury’s continued to be the beneficiary of global nervous
investors closing Monday at 2.159%.
As investors flocked to Treseary’s the moved away from Gold.
Food commodities such as Corn, Soybeans, Wheat were all down
as investors remain pessimistic about global demand.
Investors and the markets are become more jittery than optimistic.
Asia markets closed down in their Friday session on downgrade
of Spain and economic news from China. The Shanghai was down 7.41 points, Hang
Seng was down 256.02, and the Nikkei was down 75.29 points.
China reported a CPI of 6.1%; expectations were for 6.2%,
and a PPI of 6.5% well off the 7.3% that was reported in August. Markets were a bit disappointed as they were hoping to receive significantly lower numbers prompting the Chinese government
to start loosening monetary policy. Unfortunately, that was not the case as
inflation still remained at uncomfortable levels prompting some in Investors Friday
to take money off the table.
Shares in the European Markets fell on Thursday with the
financials taking some of the hardest hits. Investors began losing their euphoria with European officials and plans to stabilize their debt issue. Weak data from China and a downbeat earnings from JP Morgan Chase seemed to reignite market’s jittery nervous.
Investors and the markets seemed to get back to their jittery
self’s after little details were forthcoming from European Commission President
Manuel Barroso outlined the plan late Wednesday.
Financials had already taken a beating in the early morning trading after JP Morgan slight drop in 3rd quarter earnings, when Fitch slashed its ratings on Royal Bank of Scotland and Lloyd’s after their diligence determined they were less like to receive UK government support in the future. Also Fitch
added Barclay’s to its negative rating watch list sending the shares down 7.4%.
Two pieces of news did seem to steady the markets. First,
Fitch confirmed the UK’s triple a rating with a stable outlook. This despite
the rumor circulating Fitch would instead downgrade the countries ratings. The
markets also seemed a bit pleased with Slovakia final approving the EFSF plan
allowing the plan to become operational.
European markets rallied in their early Friday morning
session despite downgrades of banks. Fitch downgrade UBS and placed several banks on their negative outlook.
US Markets closed mixed on Thursday as the financial sector
lead the way after JPMorgan reported softer Q3 earning numbers. The Dow fell 40.72, S&P erased 3.59 points and the NASDAQ closed positive 15.51.
JP Morgan, thought by many to be not only a bell weather
stock but one of the top financial stocks, took a hit on Thursday after report
weaker earnings. JPM’s earning stroked new investor fears about health of US
banking industry and what banks who reporting earnings will look like. Investor’s
nerves are starting to become a bit jittery as earning season moves in next
Commodities were also lower on Thursday. Crude fell for a
second straight day sliding to $84.23 a barrel. Gold also traded down 0.8%.
Food Commodities were mixed on Thursday. Corn and wheat were
down, however Soybeans were up as the traders and the market continued to react
to Wednesday crop report.
Treasury’s yield continued to stay around the 2.00 mark in
Investors and markets are feeling more confident about the
Eurozone’s issues allowing the risk trade to be put back on the table.
Asian markets climbed on Thursday. The Nikkei gain 1%, Hang
Seng rose 2.3% and the Shangai composite added 0.8%.
Exporters and resource companies were among the biggest
gainers as Asian markets felt more comfortable that the latest plan to resolve
the European soverign-debt woes still stood a shot at passing all it’s
obstacles. The markets rallied despite China reporting lower export growth in September coming in at 17% , the weakest number since February, caused by a stalling global economy . Also reported
China’s Trade Surplus fell in September. More signs that China’s economy is defiantly
in slowdown mode causing analyst to wonder what effects it will have on Europe’s
Exporters were among the best performers as investors were
encouraged that economic stability in Europe may be on the horizon and could
help sustain a slowdown in the European economy. Resource stocks also notched solid gains as
economic sentiment and the prospects for demand to improved.
European stocks ended their Wednesday session higher. Financial shares lead the gains amid investor’s expectations that European policy makers will finally work out a plan to stem the euro zone debt crisis. Despite Slovkia’s initial rejection of the EFSF expansion investor felt confident by the news that lawmakers in the country were going to regroup and hold another vote
before the end of the week. Investors nervous also seemed to settle down as the
European Commission, the Eurozone’s executive arm, called on European
governments to release a the sixth tranche of emergency lending to Greece and
move the Eurozone’s permananet rescue fund up by a year. The commission also
stated the European Stability Mechanism should be up and running in July 2012
not the mid-2013 previously predicted. The European Stability Mechanism is the permanent bail out program that would replace the current EFSF program. Most importantly, the European commission stated the EFSF should be available as a last resort to lend money to governments
in need. Finally the markets heard that progress is being made.
Also aiding the European market’s rally the release of better than expected Euro-zone data. The data released Wednesday morning showed industrial production in August rose 1.2% from July and rose 5.3% year to year.
European markets were lower in their early Thursday morning
trading session on new concerns about the European economic picture for the
rest of the year and a warning from Deutche bank that earning maybe worse then
first thought due to the effects of the debt crisis. The ECB in it’s monthly
report said the EZ economy is slowing down and could be facing several
headwinds in the last quarter of the year. Trichet also said Thursday that
forcing private bondholders to accept losses on sovereign debt could damage the
euro’s reputations. The latest bailout plan for Greece negotiated during the summer called for a voluntary exchange of Greek bonds. This element of the plan is now being called into questions and some want to make it a mandatory part of the equation.
US stocks rallied Wednesday amid investors continued
optimism about European ‘s plans to stabilize their banking system. The Dow,
which is now up 5.6% on the month, gained 102.55 points. The NASDAQ climbed
21.70 and the S&P gained 11.71 points.
Despite investors putting risk back on the table several
market watchers content that Wedsenday’s rally was caused by short covering and
that the market is still stuck in the same trading range that began nearly two
months ago. The Dow has been range bound between 10700 and 11700 mostly reacting to headlines from the European debt crisis and fears of an US and global recession.
The dollar was weaker in Wednesday trading causing Gold to
rise 1.3% to $1681.30.
Oil closed down 0.3% as the International Energy Agency lowered it’s forecast for global oil demand.
Food Commodities were down after the USDA released it’s crop report yesterday cutting it’s outlook for corn for the third consecutive month. Still traders are optimistic the rally is long from over . As corn prices go down speculation calls for dips in price to spur foreign buyers such as China.
Volatility continues across all global markets as investors contemplate the effects of the Euro zone not making any substantial progress toward solving the Euro zone’s sovereign debt issues.
Asian markets closed mixed on Wednesday after a choppy trading session. Investors remained cautious about the euro-zone debt issue as they reacted to the news Moody’s downgraded Italian sovereign debt. Dragging on the markets shares of Apple which sold off as the new I- phone model rolled out at Tuesday’s news conference wasn’t the much-anticipated version 5. The Nikkei closed lower down 0.9% while the Shanghai and Hang Seng were closed for a mainland China holidays.
European Markets continued their downward plunge as investor’s continue to speculate what effects the continuing Greek debt problems will cause throughout the European banking system. Some analyst has even started to speculate that issues caused by Greek debt could cause a global double dip recession.
Stocks that were sensitive to the economy such as banks, autos and basic resources led the declines. Bank stocks continued to be hard hit as Dexia bank shares fell 37% during Tuesday’s session as the bank admitted it is facing structural problems and could breaking up. All of this after Monday’s announcement by Moody’s that the bank is under reviews for a possible downgrade due to funding issue caused by difficult conditions in the current credit markets. Investors became increasingly jittery after euro-zone ministers said they will be delaying the decision on whether Greece would be receiving its next tranche of bailout funds. Stocks did close of their lows as the markets erased a small amount of losses after FED chairman Bernanke hinted in his testimony before the US Congress the Fed was prepared to step and help the economy. European shares opened higher in their Wednesday morning trading session. European banks led the way on news the EU finance ministers meeting were looking into a coordinated move to recapitalize Euro zone banks.
The US Markets closed up Tuesday as investors furiously covered their short positions after the FT (Financial Times) reported EU finance ministers have added the topic of re-capitalizing of European banks to their discussions. Also adding to the fury a report from the WSJ (Wall Street Journal) France and Belgium were in bailout talks with the sovereign debt laden, Dexia bank, to create a bad bank to house all its bad or risky loans taking them off their balance sheet. Eventually the bad bank will be sold or taken over by France and Belgium. This would be the first bailout of a European bank in the euro zone debt crisis.
The Dow, who had been down by 250 points earlier in its trading session gained over 400 points to end positive 153 points. The S&P 500 ended its trading session up 2.25% or 24.72 points and the tech heavy Nasdaq ended up nearly 68.99 points or 3% despite Apple shares losing some ground as investor were disappointed the big announcement today did not include the I-phone 5.
The Markets were down most of the day as worst then expected economic news was released by the US. Markets began to see a small rally mid-day after Fed Reserve Ben Bernanke reassured investors the Fed was still prepared to take additional steps to help out the fragile economy. Most analysts agree this push to the positive was based more on short covering then on actually fundamental. In other words investors should get their hopes up for the beginning of a rally.