“If a battered stock refuses to sink any lower no matter how many negative articles appear in the papers, that stock is worth a close look” — J. Fraser.

1. Sarkozy and Hollande win through to final round — Nicolas Sarkozy and left-wing challenger Francois Hollande will face off against each other in two weeks’ time after they received the most number of votes in the first round of France’s presidential election. Run-off is scheduled for May 6.
2. Eurozone looks to be sinking deeper into recesson — Eurozone factory activity continued to contract in April as PMI fell to a preliminary 46 in April from 47.7 in March and vs. expectations of 48.1.
3. FOMC stays the course — the FOMC announced no major change in policy. The committee sees moderate growth with strains in global financial markets providing a big downside risk. Revised 2012 forecasts: jobless rate at 7.8-8.0% from 8.2-8.5%; inflation at 1.9-2.0% from 1.4-1.8%; GDP growth at 2.4-2.9% from 2.2-2.7%.
4. U.K. sinks into double-dip recession — the U.K. has slid back into recession for the second time since the financial crisis after Q1 GDP unexpectedly fell a preliminary 0.2% on a quarterly basis following a fall of 0.3% in Q4.
5. Banks scramble to prevent ratings cuts — the WSJ reported five major banks facing potential downgrades from Moody’s – and $22B in extra costs – CEOs are pushing back against the ratings agency with an aggressiveness not seen since before the financial crisis.
6. Business spending drop limits U.S. growth to 2.2% — Marketwatch reported that GDP misses economic estimates after surprise drop from business sector. The Commerce Department said gross domestic product rose at a 2.2% annual rate between January and March, slower than the 3.0% pace in the prior three months.
7. Standard & Poor’s downgrades Spain for the second time this year— S&P slashed Spain’s sovereign debt rating to BBB+ from A with a negative outlook. The ratings agency said the downgrade reflects worries about increased risks of the country’s government debt balanced against difficult economic conditions, as well as the potential need of more support for the banking sector.
8. AAII Sentiment Survey — according the the latest survey from AAII, Bullish Sentiment fell to a 7-month low to 27.6%. This is also the fourth consecutive week that bullish sentiment has been below its historical average of 39%.

This week’s AAII Sentiment Survey results:
Bullish: 27.6%, down 3.5 percentage points
Neutral: 35.0%, unchanged
Bearish: 37.4%, up 3.6 percentage points

Historical averages:
Bullish: 39%
Neutral: 31%
Bearish: 30%

The week ahead — Economic data from Econoday.com:

This entry was posted on Monday, April 30th, 2012 at 10:32 am and is filed under Weekly Summary. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.