Financial News 3/11/12 – 3/17/12

Economy

-Retail sales rose 1.1% in February the largest rise in 5 months.  3/14

-The Fed gave a cautiously optimistic assessment of the US economy, kept rates unchanged and said no new actions to accelerate growth would be taken.  3/14

-Weekly jobless claims dropped 14,000 for the past week, however the 4 week moving average remained flat.  3/16

-The ECB projected that real GDP growth will pick up in the second half of the year.  3/16

-The CPI rose 0.4% in February, with gas prices being the major driver.  3/17

Corporate

-The Fed announced that the vast majority of banks passed their annual stress tests potentially allowing firms to increase dividends and share buybacks. 3/14

-The Fed rejected Citigroup’s request to raise its dividend and institute a share buyback.  3/14

-J.P. Morgan announced it would buy $15 billion worth of stock.  3/14

-Goldman Sachs was in damage control mode as a VP who resigned wrote an op-ed piece for the New York Times blasting the firm for a culture that cares little about clients and is driven by a short term view.  3/15

Regulatory

-Government officials sued three futures trading firms and fined Goldman Sachs for inappropriately commingling customer money with their own.  3/14

-The SEC brought charges against two money managers who were running a fund designed to invest in pre IPO shares for misleading and overcharging investors.  3/15

Market

-Italian borrowing costs have dropped steeply in 2012.  At year end of 2011 the yield on the 10 year Italian bond was 7%, but it has fallen to 4.92%.  3/13

-Buoyed by strong retail sales, an upbeat outlook by the Fed and virtually all banks passing their stress tests gave the markets a shot in the arm for their best day of the year.  The S&P 500 gained 1.8% and is just shy of the 1,400 level.  It’s the highest point for the index since June of 2008.  The Dow rose 218 points or 1.7% to reach 13,178. It’s the highest level since December of 2007.  The Nasdaq rose above 3,000 for the first time since late 2000.  International markets saw gains with Europe rising 1.8% and Japan up as well.  On the equity surge Treasuries were dumped with the 10 year yield rising to 2.102%.  3/14

-US markets were relatively flat, but Japan surged to a 7 month high.  The Nikkei climbed above 10,000 and is up 19% this year.  With the surge in equities investors have been bailing out of Treasurys.  The 10 year Treasury yield reached the highest level since October, 2.276%.  News that the Fed will likely not take action due to the improving economy also led investors to move out of the investment.  3/15

-Another stock market milestone was reached with the S&P 500 crossing the 1,400 level for the first time since June of 2008.  3/16

-Gas prices rose 6% in February with an average gallon now at $3.83. 3/17

-US markets had their largest weekly gains of the year.  The S&P 500 and Dow rose 2.4% for the week, the largest gains since December.  The S&P is up 12% for the year.  Europe had a strong week as well up 2.6% and Japan gained 2.0%.  The yield on the 10 year Treasury has risen to 2.301%.  3/17

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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