Financial News 3/25/12 – 3/31/12

Economy

-Fed Chairman Ben Bernanke made comments that while the economy is improving and the labor market has strengthened, the recovery is still too weak to survive on its own signaling that rates will remains at their historically low levels for years. 3/27

-Consumer confidence has slipped in March.  While still confident overall the fall is over worries of rising fuel prices.  3/28

-Home prices fell 0.8% lower in January according to the Case Schiller index, but the pace of the fall has subsided.  The drop lowered the index to a level last seen in 2002. 3/28

-Orders for durable goods rose in February by 2.2%, but below expectations.  3/29

-Jobless claims for the past week declined by 6,000 and the 4 week average dropped to 365,000 the lowest level since 2008, however the pace of decline has eased.  3/30

-The final estimate for 4th quarter GDP remained unchanged at 3.0%, but was slightly below expectations.  3/30

Corporate

-The Los Angles Dodgers were sold at auction to a group led by basketball star Magic Johnson for $2.15 billion.  3/28

-Sharp sold a 10% stake in its business to Hon Hai, a Chinese electronics manufacturer, for $800 million in order to provide support for large losses Sharp expects to post this fiscal year.  3/28

-Facebook will have its IPO in May has stopped secondary market trading of its stock in order to prepare.  3/29

-Best Buy announced poor quarterly results as the company showed a loss of $1.7 billion.  The firm, which is having trouble competing with online retailers, will close 50 of its stores, cut some back office jobs and remodel its stores in an attempt to restructure its faltering business. 3/30

-Credit card processor Global Payments had a security breach as hackers stole information that potentially exposes millions of card holders to fraud.  3/31

Market

-World markets rallied on Bernanke’s comments about keeping rates low.  The S&P 500 hit its highest close in almost 4 years, 1,416.51 up 1.4%.  The Dow rose 1.2% and Europe was up 0.9%.  3/27

-Stocks fell for the 5th day in 7 on weak economic news and falling commodities.  The Dow fell 0.5%, the S&P 500 dropped 0.5%, Japan was 0.7% lower, and Europe was down 1.1%.  The 10 year treasury yield has fallen to 2.196%.  3/29

-Firms with junk credit ratings have piled into the debt markets to take advantage of the historically low borrowing costs.  Investors craving higher yields have shown high demand for the securities which have had the best performance of any fixed income investment for the year to date.  Issuance is up 12% over last year and is at its highest level on record.  3/30

-The best first quarter since 1998 came to a close Friday driven by improvements in the U.S. and the international economy along with easing concerns over Europe debt crisis.  The S&P 500 rose 12.0%, the Dow rose 8.1%, and the NASDAQ rose 19%, its best first quarter since 1991.  Gasoline prices remain a concern for the economy with oil reaching as high as $110 a barrel before finishing at $103.  With the move to stocks bonds had a weak quarter with the 10 year treasury yield rising to 2.218% to end the quarter.  The strong performance occurred abroad as well with Japan’s Nikkei Index up 19% for the quarter and Europe up 9.3%.  3/31

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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