Week Apr 20 2012 – Weekly Recap & The Week Ahead
“I keep hearing “Should I buy?” – When I start hearing “Should I sell?” that’s the bottom.” — Nick Moore (PM).
1. $60B pledge from Japan to help IMF reach $400B goal — While Spanish borrowing costs soar, IMF chief Christine Lagarde hopes the IMF will reach “critical mass” in raising more than $400B from contributing governments.
2. Buffett Rule falls in the Senate — with a 51-45 vote, Senate Republicans blocked the “Buffett Rule” to make those earning $2M annually pay federal tax of at least 30%. The measure fell nine votes short of the 60 required for the debate to continue.
3. China home prices fall in March, raising concerns of a major slowdown — according to MarketWatch — out of the 70 cities surveyed by the National Bureau of Statistics, 46 reported weaker prices from the previous month, up slightly from 45 cities that reported declines in February. Dariusz Kowalczyk, Credit Agricole CIB economist, said in a note “sliding home prices will lead to weakness in residential land prices, which will in turn add to the financial strains already weighing on local governments”.
4. Facebook aims to IPO in May — Facebook (FB) plans to carry out its IPO on May 17, TechCrunch reports, as long as the SEC signs off on the company’s paperwork in time. As expected, Facebook will aim to raise under $10B at a market cap of $100B, reflecting recent trading on secondary markets.
5. China set for further easing — The People’s Bank of China might cut banks’ required reserve ratios, among other easing measures, in order to boost liquidity and bank lending, Xinhua reports.
6. France votes, investors fret — France held a Presidential election this past Sunday, with polls showing that the left-wing Francois Hollande to beat Nicolas Sarkozy but only after a run-off on May 6. Hollande has pledged to renegotiate the EU fiscal compact to tilt it away from austerity and towards growth, putting him on a collision course with Angela Merkel and providing the potential for further market chaos.
The week ahead — Economic data from Econoday.com:
