Financial News 4/22/12 – 4/28/12

Economy

-A purchasing manager survey in Europe showed the lowest ready in 5 months driven by weakness in the manufacturing sector. 4/24

-Gasoline prices have eased as the price of crude oil has fallen.  The national average for a gallon of gas is down to $3.85 which is virtually even with a year ago.  4/25

-The S&P/Case Shiller housing index which tracks 20 metropolitan areas home prices hit a new low in February falling 3.5% compared to a year earlier.  However, the declined lessened from earlier months.  A separate index the FHFA index, showed a 0.4% gain in February, the first gain since July of 2007.  However that index contains fewer foreclosures.  4/25

-Consumer confidence remained relatively flat in April.  4/25

-Non-defense business spending slowed in March due to the expiration of a government program and slowing overseas growth, dropping 0.8% from a month earlier. 4/26

-The U.K. moved back into recession in the first quarter as GDP contracted 0.2% on the heels of a 0.3% decline in the 4th quarter. 4/26

-The Fed Open Market Committee meeting ended with them reaffirming their prior commitment to keep rates near zero through 2014.  4/26

-Jobless claims dropped by 1,000, less than expected, and the four week moving average increased to 381,750.  The number has begun to increase in April.  4/27

-The Bank of Japan said it would attempt to weaken the Yen and fight deflation by increasing purchases of Japanese government bonds. 4/27

-Spain’s credit rating was downgraded by S&P two notches over concerns that the country wil be able to cut into its deficit.  4/27

-The number of contracts signed to purchase homes rose sharply in March, up 4.1%, much higher than economists expected. 4/27

-GDP growth slowed in the U.S. in the first quarter to 2.2% down from 3.0% in the fourth quarter.  While consumer spending remained strong, increasing 2.9% over the quarter, there were large reductions in government spending and business investment.  4/28

Corporate

-Nestle acquired Pfizer’s infant nutrition business for $11.85 billion.  A price higher than many expected.  4/24

-Netflix announced that it had a loss of $4.6 million, but added 1.7 million subscribers to bring it back close to the level of subscribers it had before it attempted to initiate a price change and drove many customers away.  4/24

-Facebook’s revenue and profit declined 6% and 32%, respectively, in the first quarter compared to the 4th.  4/24

-Fitch is the first rating firm to increase Ford’s credit rating to investment grade in 7 years.  4/25

-Wal-mart is conducting an internal probe over allegations it had wide spread bribery in Mexico and a potential cover up.  4/25

-3M reported a 4% rise in profit beating forecast and raised their earnings forecast for the year.  4/25

-AT&T reported an increase of 5.2% in first quarter profits. 4/25

-Apple blew Wall Street away with their earnings release as the tech firm continues to surprise.  The company’s quarterly profit nearly doubled up 94% and iPhone shipments skyrocketed 88% on large demand from China.  4/25

-Credit Suisse’s earnings dropped significantly from the previous year, but improved from the miserable 4th quarter as its investment bank moved back into the black.  4/26

-Apple’s shares surged on its earnings release rising 8.9% to close at $610 a share.  The firm increased its market capitalization by $50 billion, roughly the size of HP, in a single day and recovered the majority of the decline it had suffered over the month.  4/26

-Online Gaming firm Zynga had a 1st quarter loss, but saw its revenue rise 32% as it looks to expand beyond Facebook. 4/27

-Chrysler’s profit soared in the first quarter on a 25% increase in revenue.  4/27

-Samsung reported a record first quarter profit of $4.45 billion, a 82% gain driven by its surging market share in smart phones.

-Exxon’s earnings fell 11% due to lower oil and gas production and a fall in profitability of its chemical business.  The firm had a net income of $9.45 billion and revenue rose by 8.8%.  4/27

-Amazon saw its earnings fall 35% in the first quarter however its large spending and expansion initiatives are beginning to pay dividends as it had a 34% rise in revenue.  4/27

-Ford saw its profits fall, but still presented solid results driven by strong profits in North America.  Daimler and Honda announced earnings increases driven by sales in North America as well.  4/

Market

-Increasing political uncertainty in France and Holland as well as more poor economic data led global stocks down.  Europe fell 2.35% and the Dow and S&P500 dropped 0.8%.  German and U.S. bond yields sank as investors moved into the safe havens.  4/24

-Global markets rose on comments by the Fed and strong earnings by Apple.  The S&P 500 jumped 1.4%, the Dow with no exposure to Apple rose 0.7%, and the tech heavy Nasdaq had its best day of the year gaining 2.3%.  Europe rose 1% and Asia was higher with China gaining 0.8% and Japan gaining 1%.  4/26

-U.S. markets choose to focus on positive news from the home sector shrugging of weaker hiring news and rose close to 1%.  The S&P 500 gained 0.7% and the Dow gained 0.9%.  Japan and Europe were slightly up.  4/27

-U.S. Stocks had their best week in over a month on positive earnings releases.  The S&P rose 1.8% for the week while the Dow gained 1.5%.  Internationally equities were more mixed with Japan down 0.4%, while Europe was up 0.5% for the week.  On news of the drop in GDP to a level below estimates, the 10 year Treasury yield dropped to 1.96% matching its lowest level of the month.  4/28

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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