Financial News and Notes 10/30/11 – 11/5/11

Economy

-The Euro zone unemployment rate rose to 10.2% in September increasing 0.1% from August.  It matches the 13 year high achieved last year.  11/1

-The OECD announced the world would face two years of meager growth high unemployment, and eroding outlook unless Europe controls its debt crisis.  11/1

-Manufacturing activity in the U.S. slowed in October, however it’s still in at a level that indicates expansion. 11/2

-U.S. car sales rose 7.5% in October.  11/2

-ADP announced that private sector payrolls rose by 110,000 in October and revised September’s number up to 116,000.  11/3

-The Fed decided to not make any new moves after their most recent meeting, but the left the door open to potential purchases of mortgage backed securities.  They now estimate that unemployment will fall to 8.6% by late 2012 and to 8% by 2013.  11/3

-Productivity in the U.S. grew 3.1% in the third quarter, its fastest pace since the start of 2010. 11/4

-The ECB, in a surprise move, cut interest rates .25% to 1.25% despite higher that targeted inflation levels due to the concerns over the bloc entering another recession.  11/4

-Jobless claims dropped by 9,000 to 397,000 over the previous week.  11/4

-The U.S. job market improved slightly in October.  Employers added 80,000 new jobs, and the government revised upwards the number of jobs created in August and September.  The unemployment rate dropped by 0.1% to 9.0%.  11/5

Corporate

-Earnings season has seen 71% of S&P 500 firms beat analyst estimates. 10/31
-MF Global Holdings filed for bankruptcy after a potential buyer backed out.  The firm run by former Goldman exec and New Jersey governor has a discrepancy in its books of hundreds of millions of dollars that U.S. regulators are examining.  It’s the 8th largest bankruptcy in U.S history.  11/1
-Honda saw profits fall by 56% for the quarter and removed a forecast for profit for the fiscal year.  The situation does not bode well for other Japanese car makers.  11/1
-Bank of America agreed to drop its proposed $5 monthly fee for using a debit card becoming the last large national bank to drop the proposed fee.  11/2

-News Corp’s revenue rose 7% in their first fiscal quarter. 11/3

-Sony announced that believes it will see a loss of over $1 billion for their fiscal year making it the 4th yearly loss in a row.  11/3

-AIG posted a third quarter loss of $4.1 billion. 11/4/11

-LinkedIn announced third quarter loss despite doubling its revenue.  11/4

-BMW posted a 24% rise in profits and will become the most popular luxury car in America this year after Lexus’ long reign on the spot.  11/4/11

-Starbucks quarterly profit soared 29% on improving sales.  11/4

-Groupon saw its IPO rise 31% to $26.11 on its first day of trading.  11/5

-John Corzine resigned as CEO of MF Global and the $659 million in customer funds thought missing were determined to be held in a JP Morgan account.  11/5

Market

-Japan launched a new round of intervention in the market in hopes of stemming the rise of the Yen and hurting exports.  10/31

-Concerns are high that the financial turmoil that has weighed on Europe is weakening the already sluggish business outlook, which could in turn cause problems for the recently reached debt deal.  The deal depends on economic growth for success. 10/31

-The confidence restored by the European debt agreement was severely shaken when Greece announced it would hold a referendum on the bailout in January.  11/1

-Stocks ended a great month on a weak note as the Dow fell 2.3%, S&P 500 fell 2.5%, and Europe dropped 2.2%.  For the month however the Dow was up 9.5% its 3rd biggest monthly percentage gain in its history. 11/1

-Global markets plummeted for a second day on the renewed concerns about Greek debt given the proposed referendum.  The Dow fell 2.5%, the S&P dropped 2.8% Japan dropped 1.7% Europe fell 3.5% and the 10 year Treasury yield fell to 2.0%.  11/2

-Germany and France, in response to Greece’s referendum have given Greece an ultimatum.  If they elect to turn down the bailout plan then they will be removed from the Euro-zone.  The move would bankrupt Greece in weeks.  11/3

-In an about face Greece backed away from its referendum vote on the nation’s bailout putting to bed fears would immediately fall into bankruptcy and out of the Euro-zone.  11/4

-The IMF will monitor Italy’s policies as the country seeks to reassure global markets.  11/5

-Greece’s prime minister survived a no –confidence vote, but said he would step down regardless once a interim coalition government is organized.  The government is then expected to pass the bailout agreed to by European leaders.  11/5

-Over the first week of November the Dow was down 2.0%, Japan fell 2.8%, Europe was down 3.7% and Treasury’s rose with the 10 year yield dropping to 2.048%.  11/5

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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