In The News:
Shhh… It’s a secret…
On Wednesday, Amazon.com (AMZN) announced it will hold a launch event in Seattle on June 18. Hmm…What could Amazon possibly be launching…its own smartphone maybe??? [Continue reading...]
Good News with a Dose of Oops…
On Monday, the ISM (Institute of Supply Management) released its monthly PMI (Purchasing Managers Index) showing American factories gained momentum throughout the second quarter of the year despite an uneven global recovery. Manufacturing activity accelerated for the fourth consecutive month in May with the manufacturing sector index rising from 54.9 in April to 55.4 in May. [Continue reading...]
Pay Up Buddy…
The U.S. Justice Department is pushing BNP Paribas to pay up more than $10 billion to resolve allegation that it evaded U.S sanctions against Iran and other countries for years. The penalty, if paid, would represent one of the largest penalties ever imposed on a bank. The penalty isn’t all that the bank is concerned about. A major sticking point of negotiations so far is the possibility that the U.S. will temporarily restrict the bank’s ability to transact in U.S. dollars. [Continue reading...]
U.S. securities regulators are embracing a plan designed to shift more stock trading onto exchanges and away from private trading venues (aka dark pools) operated by banks and other firms. The move is expected to be part of a coming Securities and Exchange Commission pilot program aimed at boosting trading in the stocks of smaller companies. [Continue reading...]
On Monday, Toyota announced, after more than a half-century, it will move its U.S. headquarters from Southern California to Texas. The move to Plano, Texas will start in 2017. The new office complex will bring together employees who are scattered around the U.S. Currently, Toyota’s sales and finance arms [Continue reading...]
The ADP jobs report, released Wednesday, shows the private sector added 191,000 jobs in March. We will have more in tomorrow’s daily digest. [Continue reading...]
In The News:
We’re Suing You..
The Federal Deposit Insurance Corp. (aka FDIC) is suing 16 big banks that set a key global interest rate, accusing them of fraud and conspiring to keep the rate low to enrich their bottom-line. The list of banks includes giants such as Bank of America (BAC), Citigroup (C) and JPMorgan Chase (JPM). The FDIC is alleging that the banks rigged the London interbank offered rate, or LIBOR, from August 2007 to at least mid-2011.
Why exactly is LIBOR important to me??? [Continue reading...]
The economy added 175,000 jobs in February higher than the 145,000 expected. The bad news the unemployment rate ticketed up to 6.7% from 6.6%. [Continue reading...]
The ADP private sector job report was released this morning showing in February 139,000 jobs were created. We will have a full recap in tomorrow’s daily digest. [Continue reading...]
On Thursday, International Business Machines Corp. (IBM) began dismissing U.S. workers as part of a $1 billion restructuring to help the company meet profit goals as it adapts to shifts in the technology industry. Workers in New York, Vermont, Minnesota, Iowa, Missouri, Oklahoma and North Carolina were let go. [Continue reading...]
Taco Bell (YUM) is launching a national breakfast menu on March 27. The menu will feature items such as the A.M. Crunchwrap. The chain says that breakfast will be available until 11am. Taco Bell has been testing and tweaking its menu in a handful of the chain’s nearly 6,000 U.S. locations over the past several months. For the national rollout, the company has hired additional staff, trained existing staff and purchased new equipment, including for the coffee it plans to start serving for the first time. It’s not clear how Taco Bell’s entry into breakfast will alter the fast-food landscape, since Starbucks also plans to roll out new and revamped breakfasts sandwiches, including a croissant sandwich with ham, cheese and egg.
The nation’s largest bank, JP Morgan Chase (JPM) is planning additional job cuts in its mortgage business on top of the 13,000-15,000 positions already due to be slashed because of plunging demand for home loans. The announcement could come as soon as Tuesday’s JPMorgan’s annual investor day. The cuts are part of a new efficiency drive at the largest US bank by assets that also encompasses staffing branches with fewer employees. Profitability remains stronger than at competitors such as Bank of America and Citigroup but the bank is looking to find new savings, partly due to technology that allows greater automation of clerical functions in branches and partly because of a plunge in demand for mortgage refinancing.
New Kids On The Block….
HTC Corp. (2498), the unprofitable Taiwanese smart phone maker, unveiled a lower-priced smartphone at the Mobile World Congress in Barcelona, as the company chases growth in cheaper devices. The Desire 816, a smartphone priced in the “mid-tier”, will be available in China starting in March and in other countries beginning in April. The company will also announce later this week its entries into the wearable phone gadget market.
Asia was mostly higher Tuesday after a positive handoff from the US.
European markets closed at the highest levels in six years on Monday. Investors shrugged off worries over tighter credit in China instead feeling some US love as the S&P hit an intraday record.
U.S. stocks rallied on Monday, boosted by M&A activity, an upbeat German confidence report and bets that the S&P 500′s will reach new high ground spurred a buying spree. DJIA: +103.84 16207.14 Nasdaq: +29.56 4292.97 S&P 500: +29.26 4292.97
Mexican Breakfast Casserole
1 bag (20 oz.) refrigerated cooked shredded hash brown potatoes
1 package (1 oz.) Old El Paso® taco seasoning mix
1 lb. bulk turkey or pork breakfast sausage
1 medium onion, chopped (1/2 cup)
2 cups shredded Cheddar cheese (8 oz.)
¼ cup milk
½ teaspoon salt
¼ teaspoon ground pepper
1 ½ cups (from 16-oz jar) Old El Paso® Thick ‘n Chunky medium salsa
Heat oven to 350°F. Spray 13x9x2-inch (3-quart) baking dish with cooking spray. Place hash brown potatoes and 1 tablespoon of the taco seasoning mix in large bowl; toss to coat potatoes evenly. Pat in baking dish.
Spray 10-inch skillet with cooking spray. Cook breakfast sausage and onion over medium-high heat 5 to 7 minutes, stirring occasionally, until thoroughly cooked; drain.
Meanwhile, beat eggs, cheese, milk, salt, pepper and remaining taco seasoning mix in same bowl with whisk until well mixed. Stir in sausage mixture and salsa. Carefully pour over hash browns in baking dish.
Bake uncovered about 40 minutes or until eggs are set in center. Let stand 10 minutes before serving.
Success is the sum of small efforts, repeated day in and day out.-Robert Collier
Your Money Back…
As part of settlement with the FTC (Federal Trade Commission), Apple (AAPL) announced Wednesday that it will refund consumers at least $32.5 million. The settlement stems from a longstanding complaint accusing the technology company of billing U.S. consumers for charges incurred by children buying mobile apps without their parents’ consent. Also under the terms of the settlement, Apple will be required to change its billing practices to ensure it obtains consent from consumers before charging for items sold in mobile apps.
In an internal memo to employees, Apple CEO Tim Cook said that the company had decided to settle rather than risk a long and distracting legal battle because the FTC’s proposals aligned with the company’s own intended changes.
Closing Up Shop…
JCPenny (JCP) announced late Wednesday that the big box retailer will close 33 stores as part of its strategic turnaround. The store closings and cutting of 2,000 positions should result in an annual cost savings of about $65 million, beginning in 2014. The 33 stores closing are scattered from Alabama to New Jersey.
The Big Cheese…
Apollo Global Management LLC (APO.N) will buy CEC Entertainment Inc. (CEC.N), the parent of Chuck E Cheese restaurant chain, for approx. $948 million. Apollo, the fund controlled by billionaire Leon Black, will pay $54 per share for CEC. The price is a premium of 11.5 percent from the stock’s Wednesday closing. CEC and its franchisees operate 567 Chuck E Cheese restaurants in 47 U.S. states. The restaurants, a kiddo’s favorite, offers musical and robotic entertainment, games, rides, play areas and food such as pizza and sandwiches.
Asian markets closed mixed on Thursday. The news more foreign money is pouring into the China’s financial markets steadied the Shanghai and Hang Seng while the Nikkei lost ground after profit taking.
European markets closed in the green for a fourth-straight session Wednesday on news the World Bank predicts growth will pick up in 2014.
US shares rallied on Wednesday with the S&P 500 hitting a new all-time high. Solid earnings and a rise in the Empire State Index (a gauge of manufacturing in NY) helped push markets higher. DJIA: +108.08 16481.94 S&P +9.50 1848.38 NASDAQ: +31.87 4214.88
2 1/2 oz. apple brandy
3 1/2 oz. ginger ale
juice of 1/4 lemons
Add to an ice-filled highball glass with the spent shell of the lemon.
If you like our drink today click here.
If my mind can conceive it, and my heart can believe it, I know I can achieve it. – Jesse Jackson
The private sector continued to grow in December adding 238,000 jobs. Friday we will get a glimpse into how the overall private and public sector grow when the much anticipated NFP (Non-Farm Payroll) report is released.
Where’s My Cheese…
Fans of the warm, cheesy dips are getting some curdling news: there is a shortage of Kraft (KRFT) Velveeta cheese. Over the next few weeks, some customers may not be able to find the product, according to a Kraft statement sent to CBS MoneyWatch. “Any issues with availability are much more noticeable given the seasonal demand,” the statement noted. “However, we have not heard from many consumers that they are having issues locating the product, and we expect this to be a short term situation.” It’s unclear how widespread the shortage will be. It is clear that the super bowl may exacerbate the situation, as the prime “chip and dip” party is less than a month away. Nevertheless, Velveeta isn’t just an icon of American food-processing ingenuity; it has been showing growth, according to Kraft’s third-quarter earnings release. Velveeta slices have boosted sales, while Velveeta dinner kits are continuing to win over consumer.
Another Day, Another Fine…
JPMorgan Chase (JPM) has agreed to pay $1.7 billion to victims of Bernard Madoff’s Ponzi scheme. It will be the largest penalty ever levied for violations of the Bank Secrecy Act.
Announced Tuesday, the settlement has the banking giant paying an additional $350 million in civil penalties to the U.S. Comptroller of the Currency. Separately, JPMorgan has agreed to pay $543 million to trustee Irving Picard, who has been tasked with recovering money for Madoff’s victims. The settlement stems from JPMorgan never filling a suspicious activity report despite an astounding $150 billion which went in and out of Madoff’s accounts. The company did withdraw about $275 million from Madoff feeder funds before the fraud was disclosed because some people at JPMorgan suspected that his consistent double-digit returns were too good to be true. As part of the settlement, the company did not have to admit wrongdoing.
Asia markets closed mixed on Wednesday. Investors liked the better economic data out of the US however, they still remained cautious ahead of economic data out of China and the Eurozone.
European markets closed higher on Tuesday after better than expected jobless figures from German and Ireland’s successful entry back into the international bond markets after its financial collapse.
US markets closed in positive on Tuesday with the S&P breaking it’s three-day losing streak. A better than expected shrinkage of the trade gap served as another encouraging sign to investors. DJIA: +105.84 16530.94 S&P: +11.11 1837.88 NASDAQ: +39.50 4153.18
Famous Queso Dip
1lb. (16 oz.) VELVEETA®, cut into 1/2-inch cubes
1 can (10 oz.) RO*TEL Diced Tomatoes & Green Chilies, undrained
COMBINE ingredients in microwaveable bowl.
MICROWAVE on HIGH 5 min. or until VELVEETA is completely melted and mixture is well blended, stirring after 3 min.
We apologize for the delay today. Sometime technology is not our friend.
“Remember, if you ever need a helping hand, it’s at the end of your arm, as you get older, remember you have another hand: The first is to help yourself, the second is to help others. – Audrey Hepburn
Have Your Cake And Eat It Too…
On Monday, Sysco (SYY) announced that it will buy rival food supplier U.S. Foods for $3.5 billion in stock and cash, creating one giant food-dominating company with a projected $65 billion in annual revenue.
The combined company will now have increased leverage selling and distributing food goods from manufacturers to restaurants, hospitals, hotels, schools and other institutions, as Sysco alone has around 425,000 customers worldwide. Last year, the two companies together collected about 27% of the revenue in the U.S. food distribution. Sysco Chief Executive Bill Delaney said that the deal will provide the new Sysco an increase in purchasing power, enhanced innovation ability and cost savings.
Sysco is ready for the antitrust regulators, acknowledging that the company might need to sell parts of its business to satisfy them. The markets liked the new union; Sysco stock was the top gainer in the S&P 500 on Monday.
Free At Last…
Almost five years after General Motors Co. (GM) first received government aid, the company is officially free from U.S. taxpayer ownership after the Treasury Department sold off its remaining stake in the nation’s largest automaker. The sale marks the end of “Government Motors,” as GM was labeled after the company required bailouts from George W. Bush and Barack Obama, which helped GM to avoid liquidation and reorganize into the giant it has become today. The only small grey cloud of this success story: The U.S. (i.e. the taxpayers) did lose about $11 billion on its investment of about $50 billion in GM.
Lululemon (LULU), the maker of popular yoga pants, founder is stepping down as chairman, clearing the way for a new chief executive to move past recent supply problems and expand overseas. Dennis “Chip” Wilson founded Lululemon in 1998 after attending a yoga class. He has been its chairman and largest individual shareholder, making him a “presence” for executives tasked with running the company. Wilson plans to vacate the chairman’s post shortly before the company’s annual meeting in June. He will retain a board seat.
Mr. Wilson built Lululemon into a $1.4 billion retailer with a devoted following by adhering to an unconventional playbook. The company’s yoga gear has been kept in tight supply and priced at a premium. Some might say he cultivated an unusual corporate culture, urging rank-and-file employees, executives and directors to attend self-help sessions at the Landmark Forum and complete the Grouse Grind, a 1.2-mile trek up Grouse Mountain near the company’s headquarters in Vancouver, British Columbia.
Asian stock markets declined Tuesday as Chinese economic data failed to wow investors into buying.
European markets closed up on Monday as investors picked better-than-expected Chinese export data over an unexpected drop in German industrial productions.
US markets closed slightly higher on Monday sending the S&P 500 to another record high. The markets had been holding steady most of their trading session but lost some ground after Richard Fisher, Dallas Federal Reserve Bank President, said the Fed should begin to pull back on the pace of its asset purchase program at its earliest opportunity. DJIA: +5.33 16025.53 NASDAQ: +6.23 4068.75 S&P 500: +3.28 1808.37
Jack Daniel’s Lynchburg Lemonade
1 part Jack Daniel’s® Tennessee whiskey
1 part sweet and sour mix
1 part triple sec
4 parts Sprite® soda
Add ice and stir. Garnish with lemon slices and cherries.
Like our drink of the day, click here for more.
“All we have to decide is what to do with the time that is given us.”
― J.R.R. Tolkien, The Fellowship of the Ring
On Friday, the NFP (Non-Farm Payroll) report gave us another Christmas present. The economy added 203,000 jobs in the month of November. Also, the unemployment rate dropped to 7.2%. We will have more details on the jobs number in our Monday edition.
On Thursday, the Commerce Department reported that the gross domestic product (GDP) grew in Q3 at a rate of 3.6%, revised upward from the 2.8% pace initially reported. The third-quarter pace was the fastest since the first quarter of 2012 and marked an improvement over the 2.5% growth rate for Q2. During the 3rd quarter, businesses accumulated $116.5 billion worth of inventories, which was the largest increase since the first quarter of 1998.
Dell Inc. (DELL) has offered to buy out a portion of the company’s roughly 110,000 employees. Dell Inc. has offered buyouts to a portion of the company’s roughly 110,000 employees. The computer maker announced the voluntary separation program to its employees this week, giving employees until December 20 to opt for the buyout packages.
Last month, the deal to take Dell private by founder Michael Dell and Silver Lake Partners closed and the days of Dell being a public company came to an end. Employee cuts had not been a part of the original game plan; however, according to a Dell spokesman, “A critical element of our strategy has been, and always will be, about improving our cost structure and freeing up capital to make the investments in growth areas that matter to our customers.”
Asian markets closed out the week mixed. The Nikkei (Japan) stabilized following the government’s announcement of a $54 billion stimulus package. The Hang Sang (China) was slightly positive while the Shanghai was lower as investors wait for Friday’s jobs number.
European stock markets closed lower on Thursday after a strong GDP growth number stirred taper fears and no signal of easing measures from the European Central Bank.
US markets closed down on Thursday. Both the S&P and Dow Jones were down for a 5th straight day as better-than-expected readings on employment claims and GDP boosted bets stimulus reductions could come as soon as this month. DJIA: -68.26 15821.51 NASDAQ: -4.84 4033.16 S&P 500: -7.78 1785.03
Bourbon Maple Smash
1/2 ounce pure maple syrup, preferably Grade A Dark Amber
1/2 ounce fresh orange juice
1/4 ounce fresh lemon juice
4 dashes of Angostura bitters
1/2 orange wheel
2 ounces bourbon
1 1/2 ounces chilled seltzer
In a rocks glass, combine the maple syrup with the orange juice, lemon juice and bitters. Add the orange wheel and lightly muddle. Add the bourbon and stir well. Fill the glass with ice and top with the chilled seltzer.
Have a safe and wonderful weekend, yall!
Clearing the Way…
A federal judge cleared the way for the largest public bankruptcy in the history of the U.S. On Tuesday, almost five months after the city filed Chapter 9 bankruptcy protection, the judge cleared the city, declaring it eligible for a fresh start. The judge approved a plan that will, among other things, allow the city of Detroit to reduce their pensions, something most municipal workers in America once thought could never happen.
Auto Sales Soar…
On Tuesday, major automakers reported their best U.S. sales numbers in six and a half years. U.S. auto sales in November rose 8.9 percent, beating the year-to-date increase of 8.4 percent. November sales were helped by aggressive discounting by the automakers and continued popularity of pickup trucks. According to industry research firm Autodata, the industry’s annual U.S. sales pace reached 16.41 million vehicles last month, the best monthly showing since February 2007, and easily beat expectations for a rate of 15.75 million.
KJ’s Take: Why do we care about auto sales? Auto sales are a good indicator of how people feel about their economic futures. If you don’t feel like your job is secure or your economic future isn’t bright, chances are you aren’t going to go buy a car.
Cyber Monday Success…
Cyber Monday online sales this year rose 21% driven by strong growth in mobile sales, according to IBM who crunches the number for the yearly event. Mobile sales increased 55%from a year earlier, accounting for about 17% of total online sales. The better online sales figures came after the retail industry main trade group reported that spending dropped for the first time in the last seven years over the Thanksgiving weekend. Estimated total spending over Thanksgiving weekend fell to $57.4 billion, down 2.7% from a year ago, according to the National Retail Federation.
Asian markets were mixed on Wednesday as investors cautiously position themselves before Friday’s big NFP jobs number from the U.S.
European markets tumbled on Tuesday. Investors started pressing the panic button a bit concerned the US Fed might start tapering faster after a string of solid economic data.
US shares dropped on Tuesday with the Dow Jones and S&P falling for third consecutive session. Investor uncertainty about the when taper will begin and fears the market is overdue for a pullback sent investors running for the sidelines. DJIA: -94.15 15914.65 S&P 500: -5.75 1795.15 NASDAQ: -8.06 4037.20
Fiery Blue Mustang
1/2 oz. banana liqueur
1/2 oz. Blue Curacao liqueur
1/2 oz. Everclear® alcohol
Cleared for Takeoff…
On Wednesday, a federal bankruptcy judge approved the settlement of the U.S. government’s antitrust lawsuit against American Airlines (AA) and US Airways (LCC). The judge ruled that the settlement did not compromise American’s bankruptcy- reorganization plan, which had been given conditional approval back in September. The ruling clears the way for the two companies to complete their merger around December 9. The merger will create the world’s largest airline. [Continue reading...]
Play It Again, Sam…
2013 just isn’t going to be a great year for JPMorgan (JPM). On Friday, the U.S.’s largest bank agreed to a $5.1 billion settlement with mortgage-finance companies Fannie Mae and Freddie Mac. The deal unveiled by the Federal Housing Finance Authority will settle accusations that the bank lied about the quality of some 129 securities, which the two mortgage giants bought, totaling $33 billion. The $5.1B settlement included about $1 billion from claims filed against JPM itself, $1.2 billion from claims against Washington Mutual (JPMorgan bought them in 2008), and about $1.8 billion from claims filed against Bear Stern. What was not part of the deal? … JPMorgan admitting to any wrongdoing.
Up and Away…
United Parcel Service (UPS) announced Q3 earnings on Friday of $1.16 per share, modestly beating expectations of $1.15. The company reported Q3 revenue of $13.52 billion, barely missing expectations for $13.59 billion. Stronger growth in Europe helped UPS deliver over 1 billion packages in the third quarter, an increase of 4.6% year over year.
UPS also announced on Friday its predictions for Christmas. Like its rival FedEx, the company expects to break records during the season, starting with 32 million packages delivered thanks to Cyber Monday, December 2. The only thing that could spoil the two companies’ wishes of a great Christmas: the weather. Thanksgiving is the last Thursday in November; therefore, not only is the holiday shopping season a week less but it is also a week closer to December, and the possibility of a winter storm hitting is greater.
KJ’s Takeaway: UPS is thought of as a bell weather stock because they deliver globally and across all different industries. A shorter Christmas season this year has the potential to have ripple effects across a number of industries, like the big box retailers, restaurants and of course our time management for gift shopping. We will all have to tune into Q4 earnings next year to see just what effect the shorter season will have.
Breaking Up Is Hard To Do…
On Friday, McDonald’s Corp (MCD) announced plans to end its 40-year relationship with H.J. Heinz Co. (HNZ), maker of ketchup. Heinz is now being led by Bernardo Hess, the former chief executive of rival Burger King Worldwide (BKW). The ketchup switch will be more apparent overseas than in the United States, as only Pittsburgh and Minneapolis serve the branded ketchup. Most Mickey Ds handout ketchup packets with only the word’s “fancy ketchup” on them, and in-store dispensers are not branded. One happy hamburger that could benefit is Heinz’s rival Hunt’s, owned by ConAgra Funds (CAG) and Del Monte (FDP).
Asian markets started out the week positive. A good hand off from the US and no real news to get in the way had the markets and investors seeing nothing up green.
European markets ended the week slightly positive taking a breather from its record breaking run. Better GDP numbers from the UK helped calm investors and give them a little reassurance the country’s economy is back on the right track.
US markets closed in the green on Friday with the S&P hitting another all-time high. An increase in durable goods along with better corporate earnings from Microsoft and Amazon had investors pushing the buy button. DJIA: +61.07 15570.28 S&P 500: +7.70 1759.77 NASDAQ: +14.40 3943.36
•1 oz. Bulleit® Rye
•0.5 oz. earl grey infused sweet vermouth
•1 piece(s) orange zest
GLASS: Rocks Glass
Combine BULLEIT® 95 Rye Whiskey, infused vermouth and bitters in a rocks glass over ice.
Express the orange zest over and around the rim of glass and place it on top of the drink.
IMF hand slap:
The US received a hand-slap from the IMF (International Monetary Fund) on Friday. In the US’s annual assessment the IMF told the Fed that it’s lack of communication regarding the exit from QE3 (Quantitative Easing) could cause damage to the US recovery as well as send destructive shockwaves across the global economy.
Inflation = Celebration?
Japan’s July CPI (Consumer Product Index) jumped to 0.4%, the largest jump since 2008. This is a win for PM Shinzo Abe and Finance Minister Taro Aso as it shows that Abenomics is getting the desired result, higher inflation. Normally one would not be excited about inflation but when country has struggled with deflation for 2 decades a change like this hint at economic recovery. [Continue reading...]
China’s central bank will scrap its controls on leading interest rates instead letting bank set their own rates.
You can run but you can’t hide:
Steve Cohen, founder of the hedge fund SAC Capital, was charged on Friday with failure to stop insider trading by two employees he supervised. Over the last year the SEC has charged two of SAC employees with insider trader but failed to get the top dog or so we thought. The charges brought are civil in nature and the SEC will seek to bar Cohen from overseeing investor funds. [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!
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.
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.
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 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 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.