Financial News 3/4/12 – 3/10/12

Economy

-China reduced its growth target to 7.5% for 2012.  The target had been set at 8% since 2003 and signals that the days of supercharged growth from China may be coming to an end.  3/6

-The US service sector expanded at a faster rate in February than expected and factory orders declined but not to the degree projected by economists.  3/6

-Europe’s growth contracted 0.3% in the 4th quarter and Brazil’s 4th quarter GDP was less than expected at 1.4%.  3/7

-Payroll processor ADP reported that private hiring rose 216K in February, outpacing expectations. 3/8

-Brazil announced that industrial production fell 2.1% in January the largest drop since the financial crisis, and the central bank announced it was cutting interest rates 0.75% in attempt to spur growth. 3/8

-Consumer borrowing rose at an 8.6% annual rate in January for the 4th month in a row of swift growth.  The expanding debt could help the recovery gain steam.  3/8

-The Fed is considering a new program that would help subdue inflation worries if they were to pursue another bond buying program in the future.   3/8

-Jobless claims for the past week rose to 362K, however the 4 week average remains near 4 year lows.  3/9

-The ECB president Mario Draghi said that further stimulus measures from the bank would be unlikely due to fears it would result in inflation.  The bank revised down its growth estimate for the year from 0.3% to a slight contraction.  3/9

-Improvement in the job markets continued to gains team with the most recent unemployment numbers.  While the unemployment rate remained at 8.3%, the number of net jobs added rose 227,000.  The gains were widespread through industries and demographic groups and outpaced estimates.  The Labor department also increased the estimated number of new hires in December and January.  3/10

Corporate

-Monday saw at least 18 companies issue over $20 billion in debt to take advantage of low inters rates and high investor demand.  3/6

-Apple had its unveiling ceremony for the latest iPad.  The tablet has a sharper display, will operate at 4G speeds and has a longer battery life.  3/8

-Anheuser-Busch InBev posted a 4.6% growth in revenue in 2011.  Sales of the iconic Budweiser beer fall in the US for the 23rd straight year, however the beer saw sales grow by 20% globally.  3/9

Regulatory

-R. Allen Stanford was convicted of orchestrating a $7.1 billion ponzi scheme.  He was convicted on 13 of 14 charges against him including fraud, conspiracy to launder money and obstructing justice.  He stole money from thousands of investors by selling them CDs that were backed by conservative investments but investing the proceeds in risky investments.  3/7

-The Treasury department has begun the process of selling $6 billion worth of AIG stock that is acquired through the company’s bailout.  AIG is expected to buy back half the shares.  3/8

-The U.S. Justice Department warned Apple and 5 other publishers that it plans to sue them over alleged collusion over how the publishers price electronic books.  3/8

Market 

-World markets had their worst day of the year on softer readings on global economic growth and concerns over the Thursday deadline for private Greek bondholders to accept a debt swap deal.  The Dow fell 1.6%, the S&P 500 fell 1.5%, Europe dropped 2.7%, and Japan was down 0.6%.  It was the largest one day drop since November.  3/7

-Greece is closing in on a deal with private bond holders on a debt swap that would allow the country to avoid a messy default.  Enough bond holders have agreed to likely allow the deal to be forced through.  3/8

-The market bounced back from its fall after reports that another effort to stimulate the economy would be lead by the Fed, and increasing odds Greece will be able to complete its debt restructuring.  The S&P 500 rose 0.7%, the Dow gained 0.6%, and Europe rose 0.6%. 3/8

-Stocks continued to rebound from the large drop earlier in the week over optimism about private Greek bondholders agreeing to a bond swap.  The S&P 500 rose 1%, the Dow gained 0.6%, Europe rose 1.6% and Japan was up 2.0%. The 10 year treasury yield finished at 2.014% 3/9

-Over 80% of creditors agreed to the Greek debt swap allowing Greece to go ahead with restructuring and will likely use legal maneuvers to require the reluctant bond holders to accept the deal.  3/9

-Stocks ended the volatile week mixed.  The Dow was down 0.4% and Europe was off 0.7%, but the S&P 500 had a slight gain and Japan finished up 1.6%.  Oil finished the week up to $107.40 a barrel, gold ended at $1,710.90, and the 10 year treasury yield rose to 2.037%.  3/10

DiggLinkedInDeliciousRead It LaterStumbleUponEmailGoogle BookmarksGoogle BuzzFacebookShare
This entry was posted in Monthly Market Commentary. Bookmark the permalink. Both comments and trackbacks are currently closed.
  • Contact Us
    Raffa Wealth Management
    1899 L Street, NW
    Suite 900
    Washington, DC 20036
    Tel: 202-955-6734