Archive for May, 2012

Week May 25 2012 – Weekly Recap & The Week Ahead

Tuesday, May 22nd, 2012

There will not be any re-cap for the week of May 25 2012. We are away for some needed R&R.

Have a good week.

The staffs at EGS.

Week May 18 2012 – Weekly Recap & The Week Ahead

Monday, May 21st, 2012

“Wide diversification is only required when investors do not understand what they are doing”Buffett

1. Greek Politicians Fail to Agree on Government, Talks EndCNBC reported Greek politicians failed to agree on a government, nine days after an inconclusive election.
2. Moody’s Downgrades Italian Banks, Outlook Negative — Moody’s Investors Service downgraded the long-term debt and deposit ratings for 26 Italian banks, citing the country’s recession and rising bad debt levels.
3. Feds crack down on “pump and dump” scamsters — Regulators halted trading in nearly 400 microcap stocks in one of the SEC’s biggest efforts yet to crack down on potential fraudsters using “pump and dump” tactics before they occur.
4. Industrial production rebound strongly in AprilOverall production at the nation’s factories, mines and utilities rose 1.1% in April, the strongest gain since December 2010 and well above expectations. Also, the government reported that housing starts climbed in April and beat expectations.
5. Moody’s hits Spain banks — Moody’s Investors Service downgraded 16 Spanish banks and Santander UK PLC, a U.K.-domiciled subsidiary of Banco Santander SA (STD, SAN.MC), the latest blow for a country already facing economic recession, surging unemployment and a five-year property bust. Also, Customers of troubled Spanish bank Bankia, nationalized last week, have taken out over 1 billion euros ($1.3 billion) from their accounts over the past week, El Mundo newspaper reported .
6. Facebook IPO with record $104B market cap — Facebook (FB) debuted on Nasdaq last Friday with a market cap of $104B, the highest ever for a firm at the time of its IPO.
7. JPM’s CIO holds $100B of risky bonds — the FT reports JPMorgan’s (JPM) Chief Investment Office has built up over $100B of positions in complex, risky bonds and structured products, with the CIO’s “non-vanilla” portfolio now over $150B.

The week ahead — Economic data from Econoday.com:

Week May 11 2012 – Weekly Recap & The Week Ahead

Monday, May 14th, 2012

“THE STOCK MARKET IS A NO-CALLED-STRIKE GAME. YOU DON’T HAVE TO SWING AT EVERYTHING – YOU CAN WAIT FOR YOUR PITCH. THE PROBLEM WHEN YOU’RE A MONEY MANAGER IS THAT YOUR FANS KEEP YELLING, ‘SWING, YOU BUM!’”— Warren Buffett

1. U.S. set to make profit on AIG bailout — the taxpayer could make a profit of $15.1B on the $182B bailout of AIG (AIG) in 2008, the Government Accountability Office has estimated. The latest return will come from the Treasury’s sale of $5.8B worth of AIG shares for $30.50 each, above its break-even price of $28.72
2. Spanish Bank Worries — Spain will require its banks to raise an additional 35 billion euros ($45.5 billion) in provisions against property loans, Reuters reported. The amount is in addition to the €54 billion banks must already raise to protect against exposure to property loans in the wake of the country’s burst housing bubble.
3. Chinese Trade Data Show Surprising Weakness — according to MarketWatch, Chinese trade data showed a sharp drop in activity in April, with both export and import growth falling well short of expectations. Exports rose 4.9% in April from a year earlier, while imports rose just 0.3%, data released by China’s General Administration of Customs showed.
4. Spain nationalizes Bankia bank — The Bank of Spain confirmed the partial nationalization of Bankia after it was unable to repay €4.47B it owed the government. The loan will instead be converted into shares.
5. J.P. Morgan Chase & Co. announced $2 billion trading loss — JPMorgan (JPM) held discussions with U.K. regulators after revealing that its Chief Investment Office, headed by “London Whale” Bruno Iksil, took $2B in losses from a failed hedging strategy and could take another $1B in Q2.
6. AAII Sentiment Survey — survey of bullish sentiment from the American Association of Individual Investors (AAII), bullish sentiment dropped from 35.4% down to 25.4%. This puts bullish sentiment at the lowest level since September.

The week ahead — Economic data from Econoday.com:

Week May 4 2012 – Weekly Recap & The Week Ahead

Monday, May 7th, 2012

“Pullbacks near the 30-week moving average are often good times to take action”Michael Burke

1. Spain enters recession, S&P downgrades banks — Spain entered recession in Q1 for the second time since the financial crisis as GDP shrank 0.3% on quarter, although that was better than forecasts of -0.4%.
2. Growth among U.S. manufacturers expanded in April at the fastest pace in 10 months — Institute for Supply Management (ISM) rose to 54.8% from 53.4% in March, the highest reading since June 2011. The new-orders index, an indication of future demand, jumped to 58.2% from 54.5% in March. The production index also rose, up 2.7 percentage points to 61.0%.
3. Chinese factory activity sends out positive signal — China’s official PMI rose to a 13-month high of 53.3 in April from 53.1 in March and was well above last week’s HSBC “flash” PMI of 49.1, although the reading fell short of expectations of 53.5.
4. Facebook IPO valued at almost 100X profit — Facebook (FB) may sell up to $13.6B in stock, including with the over-allotment option, after pricing its IPO at $28-$35 a share. That would give it a market cap of $77B-$96B, or as much as 96X its 2011 net profit of $1B.
5. Hollande ousts Sarkozy in French vote — French President Nicolas Sarkozy on Sunday became the latest in a long line of European leaders to lose his job in the wake of the euro-zone debt crisis, conceding defeat to Socialist challenger François Hollande.

The week ahead — Economic data from Econoday.com:

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