Financial News 8/26/12 – 9/1/12

Economy

-The S&P Case-Shiller home price index rose 0.5% in June from a year ago. 8/29

-Banks increased their lending in the second quarter by 1.4% in a positive sign for the economy. 8/29

-Americans reduced their debt burdens in the second quarter by 0.5%.  8/30

-In the second revision of the 2nd quarter GDP the number was revised up to 1.7% from 1.5%.  Also the Fed released its Beige book report on U.S. economic conditions which should most of the country growing modestly in July and through the first half of August.  8/30

-Consumer spending rose 0.4% in July for the fastest pace of growth in a month since February. 8/31

-Jobless claims were flat over the past week.  8/31

-In Bernanke’s speech at a Fed retreat in Jackson Hole he said he was keeping all options on the table, but did not come out and say the Fed would begin and new fiscal stimulus measures.  In past years he had strongly hinted at additional Fed stimulus action at the event.  9/1

-Brazil’s recent anemic growth continued as the government announced the countries second quarter growth rate was 1.6%.  Despite government efforts to increase growth, the GDP number trailed expectations.  9/1

Corporate

-Hertz announced that it has reached an agreement to buy Dollar Thrifty for $2.3 billion.  The deal consolidates the rental car industry to three major players.  8/27

-Citigroup reached a settlement with investors who has sued the company over misleading them about the extent to which the company had holdings in subprime debt issues on the eve of the credit crisis.  The firm will pay $590 million.  8/30

Market

-Catalonia became the third province in Spain to request funds for a bailout from the central government illustrating that Spain remains in turmoil.  The region is looking for $6.3 billion.  8/29

-Markets sank to their lowest level in four weeks on comments from Euro zone officials and a weak reading of Euro zone economic sentiment.   The S&P 500 and Dow both sank 0.8% and Europe slide 0.8% as well.  8/31

-Markets reacted favorably to the Fed chairmen’s remarks on Friday with global stocks rising.  Although not saying moves were imminent, Bernanke left all options on the table.  The Dow rose 0.7% and S&P 500 gained 0.5%.  For August, the S&P 500 gained 2%, while the Dow crept up 0.6%.  It was the third straight month of gains for both indices.  Europe rose 0.7%, but Japan saw stocks fall 1.6%.  Expectations of potential action by the Fed pushed the 10 year treasury yield down to 1.59%, a three week low.  On the flip side gold jumped up 1.9% to finish at $1,684.6 and oil gained 2% to reach $96.47 a barrel.  9/1

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