Financial News for the Week Ending December 15th

All the news you need to stay informed about what’s currently driving the market – courtesy of Raffa Wealth Management, LLC.

After rising above pre-election levels during the week, U.S markets ended the week down concluding a three week winning streak.  Fiscal cliff negotiations continued to weigh on stock markets as little progress has been made and the deadline is quickly approaching.  The S&P 500 fell 0.3% and the Dow dropped 0.2% for the week.  In Europe stocks were flat ending up 0.1% and Japan jumped 2.2% on positive news out of China and weakening Yen.  On the fixed income side the 10 year Treasury yield rose to 1.709%. 

Due to revisions to growth in the second quarter, Japan is now in a recession.

EU finance ministers reached an agreement that would bring most of the continents’ banks under a single supervisor.  The ECB would then be able to police the most vulnerable banks and force them to raise their capital requirements or shut them down.  The moves were geared to help prevent future crises and help resolve Europe’s ongoing problems.

The Fed concluded its most recent policy meeting by announcing that it was replacing its Operation Twist program with additional bond purchases.  They will purchase $85 billion a month of Treasury and mortgage backed securities.  Bernanke said the Fed would also continue to keep interest rates near zero until unemployment fell to 6.5% or inflation rises to 2.5%. This is a new step for the Fed placing specific hurdles that will signal to markets their future policy moves. They expect to keep short term rates at the near zero level until 2015 based on current Fed projections. 

Delta agreed to buy 49% of Virgin Atlantic for $360 million.

Berkshire Hathaway bought back $1.2 billion worth of shares in an unusual move for the company.

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Raffa Wealth Management is an independent investment advisor providing nonprofit organizations, high net-worth investors, and qualified retirement plans with a full range of investment consulting services.  We were established to fill the need for transparency, clarity, and vision in the professional management of investment assets.   Visit us at www.raffawealth.com

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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