Financial News and Notes 1/29/12 – 2/4/12

Economy

-The savings rate ticked up from 3.5% in November to 4% in December. 1/31

-Spain’s GDP shrank in 4Q by 0.3% for the first decline since the country came out of recession two years ago. The downturn highlights the costs of its austerity measures. 1/31

-Consumer confidence fell in January after rising to end 2011 falling well short of expectations. Recent gains in unemployment have not been enough to outweigh slow wage increases and the weak housing market. 2/1

-January’s manufacturing index rose from December and marked the 30th straight month of manufacturing expansion. Global manufacturing numbers were positive as well. While still contracting, European manufacturing contracted at a reduced rate. In China, factory productivity accelerated. 2/2

-U.S. auto sales continued to rise, gaining 11% in January there largest monthly gain in close to 4 years. 2/2

 -ADP announced 170K private sector jobs were added in January, which was in line with expectations. 2/2

-Jobless benefits claims continue to fall. The most recent weekly number dipped by 12,000 to 367,000, well below the 400k readings of the summer and fall. 2/3

-Retail sales saw solid gains in January. Thomson Reuters reported 4.2% sales growth when a 2% increase was expected. 2/3

-The Job market continues to rebound as January surprised economists with a further drop in the unemployment rate. The unemployment rate fell to 8.3% for the 5th consecutive month of falling unemployment. The economy added 243,000 jobs, the most since early last year and the unemployment rate reached its lowest point since February of 2009. 2/4

Corporate

-Regulators looking into the disappearance of $1.2 billion in customer money from MF Global are beginning to think the funds are lost. 1/30

-UPS announced a 29% drop in fourth quarter profit amongst a weaker international market and a large pension charge. However, it reported a brisk pace of shipments in the U.S. 2/1

-Exxon saw profits of 1.6% in the fourth quarter narrowly beating analysts’ estimates. 2/1

-Amazon’s 4th quarter profit took a dive falling 57% as expansion costs continued to weigh on the online retailer. Revenue rose 35% for the quarter. 2/1

-European regulators officially denied the merger of NYSE and Deutsche Borse saying the combination would create a “quasi-monopoly.” 2/2

-Chrysler had positive earnings in the 4th quarter and for 2011 for the first full year profit since coming out of bankruptcy in 2009. The firm also expects revenue to rise by 18% in 2012. 2/2 -As part of its bankruptcy plan AMR the parent of American Airlines announced it would shed 13,000 jobs and cut pensions in order to gain $2 billion in costs savings. 2/2

-Facebook officially filed for an IPO that is expected to value the social networking site between $75 and $100 billion. The company is looking to raise $10 billion making it one of the largest IPOs ever and the largest ever internet firm IPO. Its financials were revealed for the first time showing the company earned $1 billion last year on $3.71 billion in revenues mostly from ad sales. 2/2

-Drug maker, AstraZeneca is cutting another 7,300 jobs bringing its total cuts over the past 5 years to 30K. 2/3

-Deutsche Bank saw earnings plummet 69% in the 4th quarter driven by the investment bank’s results from the European debt crisis. 2/3

-Natural resource giants Glencore and Xstrata are considering a merger, which would create an $80 billion firm combing a large miner with a raw materials trader. 2/3

Regulatory

-The Senate passed a ban on insider trading by lawmakers and their staffs. The bill now moves to the House. 2/3

Market

 -Germany’s finance minster stated that the euro zone may with hold another bailout for Greece, which would push the country into default, unless the nation can persuade the country bloc that it can make significant progress in the fiscal situation of the state. 1/30

-Portugal’s borrowing costs rose to a Euro era high of 16.4% over concerns that the debt deal wrangling seen in Greece could be coming to Portugal. 1/31

-Euro zone countries agreed to tighten their fiscal union and agreed to details of a permanent bailout fund for the country bloc. 1/31

-Commodity prices rose sharply in January as investors concerns that problems in Europe could spread elsewhere began to dissipate. It reversed the trend of the 4th quarter which saw commodities plummet, gold rose 11%, silver rose 19%, tin gained 29%, Corn rose 10% and wheat jumped 15%. 2/1

-U.S. indexes posted their best January in 15 years. The Dow rose 3.4% and the S&P 500 gained 4.4% for the month. The 10 year treasury ended the month at 1.83%. 2/1

-Spurred by the stronger than expected unemployment numbers the markets rallied strongly to end the week. The Dow hit its highest level since May of 2008 as it rose 1.2% to 12,862. It is now 10% below its record high close. The Nasdaq, heavily weighted by technology stocks, closed at its highest level since December of 2000. The S&P rose 1.5% and is up 6.9% for the year to date. For the week the Dow was up 1.6%, Japan was down slightly, and Europe rose 3.6%. 2/4

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