Financial News 11/11/12 – 11/17/12

Economy

-Japan’s economy shrank 3.5% over the third quarter; a sharp contraction after growth earlier in the year that will force Japanese authorities to action.  11/12

-The number of job openings per job seeker continues to improve.  In September there were 3.93 job seekers per opening compared to 4.01 in November of 2011.  11/13

-Retail sales fell 0.3% in October for the first fall in four months.  11/15

-Industrial production plummeted in the Euro zone in September falling 2.5% providing evidence that the downturn in Europe has likely quickened.  11/15

-The CPI-U eased in October rising only 0.1% as gas prices fell.  Core inflation rose 0.2%.  11/16

-The Euro-zone officially moved into recession in the third quarter as GDP in the region contracted 0.2%.  High unemployment and fiscal austerity continue to undermine Europe.  France and Germany did post modest growth but the next three largest economies, Italy Spain and the Netherlands all shrank.   11/16

Regulatory

-BP received a record fine and agreed to accept fault as a result of the explosion and oil spill at its Deepwater horizon drilling rig.  The firm will pay $4.5 billion and plead guilty to criminal charges.  It is the largest fine ever levied by the Justice Dept.  BP is not out of the woods yet as it still faces government civil penalties related to the pollution the spill caused.  11/16

-JP Morgan and Credit Suisse agreed to settlements with the SEC totaling a combined $417 million as they were alleged to have misled investors in mortgage backed securities they packaged that were backed by subprime loans.  11/17

Corporate

-Home Depot announced a 1.4% increase in earnings in the third quarter beating estimates and the firm raised its profit expectations for 2012.  The firm said it is seeing a rebound in the housing market improving its sales.  Sales also rose 4.3% in the US.  11/14

-Cisco reported an 18% surge in profit and a 5.5% increase in revenue for its fiscal first quarter.  While the firm remained cautious in the face of European difficulties, the announcement beat expectations.  11/14

-Both Target and Wal-Mart produced improved third quarter earnings results gaining 15% and 9%, respectively.  11/16

-Dell’s quarterly profit plummeted 47% as PC sales continue to weaken.  11/16

-Hostess Brands, maker of the Twinkie and Wonder Bread, announced it would go out of business after it could not reach an agreement on pension and wage cuts with its baker’s union.  The move would put 18,500 employees out of work.  11/17

Market

-Over the weekend Greece passed a 2013 budget that includes additional austerity measures needed to appease international creditors and release further funding for the country.  However the funding may still be weeks away.  11/12

-The U.S. is projected to become the world’s largest oil producer by 2020 due to the shale oil boom according to the International Energy Agency.  11/13

-Gas prices have hit a four month low falling to a national average of $3.45.  11/14

-U.S. markets continue to struggle over Europe and the fiscal cliff.  For the day the Dow fell 1.5% and the S&P 500 dropped 1.4%.  Riskier stocks have also fared poorly over the last month.  The Russell 2000 benchmark of small cap stocks and the NASDAQ composite of mainly technology stocks have fallen 11% since highs reached in mid-September.  11/15

-US markets bounced back to end a rough week.  After news that “constructive” budget talks took place between the two parties markets rallied.  The S&P gained 0.5% and the Dow gained 0.4%, however for the week the S&P 500 and Dow were down 1.5% and 1.8%, respectively.  Europe sank 1.0% for the day and was down 2.7% for the week.  Japan gained 2.2% on Friday driven be election hopes and rose 3.0% for the week.  11/17

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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