Financial News and Notes 2/12/12 – 2/18/12

Economy

-Economist surveyed now project GDP to rise 2.5% in 2012 and put the chances of another recession at 16%. 2/13

-The Bank of Japan announced an increase to its asset purchase program designed to help weaken the Yen against foreign currencies to help the export driven country.  2/14

-January retail sales gained 0.4%, below expectations, and November and December retail sales were revised down.  2/15

-Greek GDP dropped 7% and Portugal dropped 2.7%  in the 4th quarter compared to a year earlier.  2/15

-Economic activity tightened across most of the Euro zone in the 4th quarter.  The GDP for the Euro zone fell 0.3%, however the number was lower than economists expectations.  2/16

-The most recently released Fed minutes show officials were split between those open to additional stimulus measures and those opposed to additional action, but the door was left open to resume the bond buying program. 2/16

-New home starts rose 1.5% in January, but remain low compared to historical numbers.  Housing starts are up 9.9% year over year driven by large number of condo and apartment projects.  2/17

-Weekly jobless claims continued their descent falling 13,000 to 348,000 to reach their lowest level since March 2008. 2/17

-The CPI rose 0.2% in January, and the core CPI number rose 0.2% as well, in line with expectations.  2/18

Corporate

-Google’s acquisition of Motorola Mobility for $12.5 billion received Justice Dept and EU approval. 2/14

-Zynga, the online game maker, reported a loss of $435 million in its first earnings release as a public company, however its revenue rose 59%. 2/15

-AMR, parent company of American Airlines, announced a loss of $2 billion for 2011 as it continues to restructure.  2/16

-The World Bank’s president, Robert Zoellick, announced he would step down this summer. 2/16

-GM posted their highest full year earnings ever this past year of$7.6 billion, however the company expressed the need for large cost cutting to maintain its current profitable trend.  2/17

Market

-Investors have pulled $76 billion from equity mutual funds since the end of September while the market is up 25%.  2/13

-Greece’s parliament officially approved the new round of austerity measures which will open the door for a new bailout.  Riots broke out in the streets of Athens over the passing of the cuts package.  2/13

-Gold has risen 10% for the year to date to $1,723 and is up 26% from a year ago. 2/14

-Moody’s announced that it gave the U.K. a negative outlook opening the door for a potential credit downgrade.   It also downgraded 6 other European nations including Italy and Spain.  2/14

-Oil prices have risen substantially in recent weeks and could be a threat to the continued economic recovery seen in the U.S.  Rising tensions between the U.S. and Iran has been a driver in the price increases.  Crude oil rose 1.1% to $101.80 a barrel on Wednesday.  2/16

-U.S. markets had their largest fall of the year over continued concerns over the Greece bailout and a weak reading of industrial production in the U.S.  The Dow fell 0.8% and the S&P dropped 0.5%. 2/16

-Renewed optimism that a Greek deal will be completed and positive US economy news led the US markets higher.  The Dow gained 1.0% to finish at a 4 year high and the S&P gained 1.0% as well.  Since early October the Dow is now up 21% and small cap stocks have performed even better up 36%. International performance was mixed with Japan down slightly and Europe up slightly.  2/17

-U.S. market rose slightly to end the week, but inched closer to levels last seen in early 2008.  Europe rose 0.6% to trade at its highest level since last summer, Japan rose 1.6% to a six month high and oil rose 0.9% to finish at $103.24 a barrel a nine month high.  2/18

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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