Financial News 10/7/12 – 10/13/12

Economy

-Germany’s exports jumped in August and industrial output dropped only slightly showing the German economy remained resilient in the face of a economically weakening euro zone.  10/9

-The IMF reduced its global growth forecast and stated the world is at risk of sliding back into recession after emerging from financial crisis just 3 years ago.  The group lowered its global forecast for growth to 3.3% for this year and 3.6% for 2013.  10/9

-The weekly jobless claim numbers came in much better than expected fell by 30,000 to 339,000 its lowest level since 2008.  However the numbers were skewed by one state that did not fully report its data.  10/12

-Consumer confidence rose to its highest level in 5 years in October. 10/13

Corporate

-The third quarter earnings season is expected to be the first in 11 quarters to not have positive revenue growth for firms in the S&P 500.  Earnings are expected to contract by 1.34%.  10/8

-The third quarter earnings season was kicked off with Alcoa showing a loss.  The result was mostly due to settling a legal battle over bribery allegations.  Operations at the company beat estimates and the firm had a $32 million gain for the quarter when factoring out the onetime issues.  10/10

-Toyota announced a major recall saying 7.4 million vehicles have a potential fire hazard as a result of faults power window switches. 10/11

-The potential mega merger between two European aeronautic and defense powers, EADS partly owned by France, Spain, and tangentially Germany and BAE in the U.K. fell apart as the result of nationalist differences in France, U.K., and Germany.  10/11

-Sprint Nextel, which has had significant trouble maintaining its financial footing over the last five years, is in talks with Japanese firm Softbank to purchase 70% of the U.S. wireless carrier.  10/12

-J.P. Morgan and Wells Fargo saw profits surge 34% and 22% year of year respectively on increased mortgage lending volume.  10/13

Regulatory

-The House intelligence committee released a report stating that Chinese tech giant Huawei, posses a national security threat.  They found that the firm’s equipment could be used for spying on Americans and that it may have violated U.S. laws.  The company is attempting to expand in the U.S.  10/8

-U.S. authorities sued Wells Fargo for bad lending practices that left the insurance program from the Federal Housing Administration to pay for the costs.  The government is seeking hundreds of millions in damages.  10/10

Market

-The IMF said that Spain, France, and other Euro zone countries will not hit their budget targets agreed to with European authorities setting up the potential of additional austerity measures. 10/10

-Stocks sank after a reduced growth forecast from the IMF.  The S&P 500 fell 1.0%, the Dow dropped 0.8%, and Europe sank 0.5%.  10/10

-Spanish debt was downgraded by S&P two notches to BBB-, pushing the financially ravaged country close to junk status, which would drive its interest rate higher.  10/12

-Global stock markets had a down week on increasing worries over the state of the global economy.  The Dow had it worst week since the end of May falling 2.1%, while the S&P500 sank 2.2%.  International markets were down as well with Japan falling 3.7% and Europe sinking 1.7%.  Oil advanced after its recent declines rising back about $90 a barrel to $91.86.  10/15

There is no guarantee that any investment strategy, including those described here, will be successful. Any investment or investment strategy can lose money. Past performance does not guarantee or predict future results. You should not assume that any discussion or information contained in this newsletter serves as the receipt of, or as a substitute for, personalized investment advice from Raffa Wealth Management, LLC. This information was gathered from reliable sources but we cannot guarantee accuracy. Indexes do not reflect the fees associated with actual investments and such fees would reduce the performance illustrated.
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