Week June 29 2012 – Weekly Recap & The Week Ahead
“Buy low, sell high, cut your losses, let your profits run.” — Leon Cooperman
1. Sale of new U.S. homes rise to 2-year high in May — Sales of new single-family homes rose to an annual rate of 369,000 in May to mark the highest level in more than two years. The supply of new homes on the market, at current sales pace, fell to 4.7 months from 5.0 in April.
2. Spain makes formal request for bank bailout — Spain has formally asked the Eurogroup for a bank rescue of up to €100B, which, says Economy Minister Luis De Guindos, should be enough to cover all the needs of the country’s banks and provide a security buffer.
3. Stockton, California, to File for Bankruptcy Protection — Stockton, California, said it will file for bankruptcy after talks with bondholders and labor unions failed, making the agricultural center the biggest U.S. city to seek court protection from creditors. Stockton becomes one of the biggest U.S. cities to file for bankruptcy with debts of $700M. Stockton, which has already defaulted on three sets of bonds, got into trouble due to high retiree costs for municipal workers, spending on a revitalization effort, and falling property-tax revenue.
4. Cyprus requests European bailout — Cyprus, with its banking system ravaged by exposure to Greek sovereign debt, became the latest victim of Europe’s debt crisis by requesting aid from its euro-zone partners.
5. News Corp.’s Murdoch Said to Consider Splitting Company — Rupert Murdoch may reportedly split News Corp. (NWS) into two companies, one focused on publishing and the other on entertainment. Internal discussions are said to be at an advanced stage.
6. U.S. grapples with natural gas exports — the question, with exports of natural gas, is how much is too much? Both sides of the debate are wary of a public brawl, either for not wanting to be seen as opposing exports in general.
7. Obamacare’s Insurance Rule Is Upheld by Supreme Court — per CNBC, the Supreme Court, in a landmark ruling last Thursday, upheld the individual insurance requirement at the heart of President Barack Obama’s health care overhaul. The court, however, found problems with the law’s expansion of Medicaid, but even there said the expansion could proceed as long as the federal government does not threaten to withhold states’ entire Medicaid allotment if they don’t take part in the law’s extension.
8. EU Summit agrees to create single bank regulator in bid for banking union — EU leaders agreed that once a bank supervisor is in place, Europe’s permanent rescue fund — the European Stability Mechanism — will be able to directly recapitalize banks.
The week ahead — Economic data from Econoday.com:
