Financial News 9/9/12 – 9/15/12

Economy

-China reported reduced imports and falling export growth in August in the most recent economic sign that growth is slowing in the country.  9/10

-Consumer borrowing decreased in July for the first time in almost a year.  9/11

-The median household income has sunk to a level last seen in 1995.  9/13

-The highest court in Germany approved the permanent bailout facility removing uncertainty over the emergency funds.  9/13

-The Fed made the anticipated move of launching a third round of long term bond purchasing or ‘Quantitative Easing 3’ in hopes of jump starting the economy to what is deemed more satisfactory growth levels.  The Fed said it would begin buying $40 billion of mortgage backed securities a month until they believed the job market had substantially improved; leaving the time period for action open ended.  In addition, they extended their promise to keep interest rates at their near zero levels through mid-2015.  The Fed will also continue its Operation Twist program – buying $45 billion of longer term Treasury bonds using the proceeds of sales of short term Treasurys. 9/14

-Mortgage rates remained steady last week as the 30 year mortgage stayed at 3.55%.  The rate is close to the record low of 3.49% hit in late July and could potentially head lower after the Fed’s announcement of a third wave of bound buying.  9/14

-Russia’s central bank made an inflation fighting move by raising interest rates 0.25% for the first increase in 9 months.  9/14

-Retail sales rose 0.9% in August for its largest jump since February, however the reading was mostly driven by higher gas prices. 9/15

-The consumer price index rose 0.6% in August also driven by increases in food and energy.  Removing those items it advanced only 0.1%.  9/15

-Consumer confidence edged up in the most recent reading.  9/15

Corporate

-The Treasury announced it would sell $18 billion of AIG stock making the government a minority shareholder for the first time since the company was bailed out in the throes of the financial crisis.  9/10

-HP announced it would be cutting 2,000 more jobs than previously outlined to bring the total work force reduction over the next two years to 29,000.  9/11

-The Treasury’s position in AIG has been reduced to about 22% after Monday’s stock sale.  9/11

-Apple released the iPhone 5 which is taller, slimmer than its predecessor with a sharper camera, faster processer and is compatible with LTE networks.  9/13

Regulatory

-A former banker at UBS who was a whistleblower over U.S. clients who hid assets from the IRS in Swiss bank accounts was awarded $104 million for his help in the government’s effort to crack down on the tax evasion.  It is believed to be the largest ever whistle blower payout.  9/12

-The NYSE agreed to pay $5 million to the SEC to settle allegation it had given trading data to some customers ahead of others.  Subscribers of certain property databases were receiving stock quotes several seconds before the broader market.  It was the first fine ever levied by the SEC against an exchange.   9/15

Market

-Markets cheered the news of additional Fed action.  The S&P 500 shot up 1.6% and the Dow leapt 1.5% to hit fresh multi year highs.  The Russell 2000 gained 1.3%.  Asian markets were up over 1.1% in early Friday trading.  Gold hit its highest level since February rising 2.2% to $1,769.10.  9/14

-Dow Jones announced that UnitedHealth Group would replace Kraft Foods in the Dow Jones Industrials Index.  9/15

-Stocks had a strong week on the news that the Fed will continue to keep interest rates low and will begin another open ended phase of bond buying.  The S&P 500 advanced 1.9% and the Dow gained 2.2% for the week.  Internationally, Europe was up 1.3% and Japan rose 3.2% for the week.  The 10 year Treasury rose to 1.869% and oil is up to $99 a barrel.  9/15

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