The Week That Was – 3rd Week In June

 

• Photo above oil slick Gulf of Mexico.
• Monday Moody’s downgraded Greece’s bonds to junk while Euro-zone factories ramped up production at a record rate, according to Monday’s WSJ. Germany seems to be the go-to country with factory output increasing some 14% over last year. Big ticket items are what’s been driving production along with exports. This does not help small fringe countries such as Ireland, Spain, Greece and Portugal. Gold down, oil up, indices mixed for the day as nervous traders took money off the table killing a solid rally. (S&P already had previously rated Greek bonds as junk).
• Steve Goldberg in May Kiplinger reports on the one class of stock that will come close to matching the market’s long-term return is the so-called mega-stocks. The chief investment officer at Jermemy Grantham predicts that these mega-stocks are today dirt cheap. The only other sector that they like is emerging markets.
• IPO alive and well- Tuesday saw the last privately owned financial exchange go public and do it in a big way. Shares of CBOE –Chicago Board Options Exchange traded at the top of their IPO range and ended up +12%.
• Tuesday also saw triple digit gains hold and gain strength to the close of business. JP Morgan loves tech and tech was the engine on Tuesday. The euro also climbed but this could be a ‘temporary situation’. Traders cautioned as not reading too much into the day as volume was thin.  Oil jumped to $77.
• The new ‘in-words’ for columnists and analysts, double-dip recession, like we’re so much out of this one we’re ready for another. Nothing that $9 trillion coming back to the market couldn’t cure.
• New financial regs a-coming. Locking in higher FDIC insurance for mom and pop at the bank and and letting rating firms slip off the hook.  Instead of having oversight on them lawmakers decided to spend more time investigating that option until the idea dies a long slow death, or the day I forget how to use a spoon. The rating firms are the folks that gave AAA a bad name in the name of money. Need a bond to sell to a gullible bank? Slap on a AAA rating.
• Expect banks to start charging for checking, debit cards to make up for the billions lost due to their own foolishness.
• France, ze country, announced Wednesday they were upping the retirement age to 62 from 60. It’s unclear if this is for government workers or all workers, no word on that. The unofficial 20 hour work week and 2 months mandatory summer vacation is unchanged. Viva la France!
• Wednesday you may as well have stayed in bed. The Fast Money crowd from CNBC report that the ‘stealth Bull market is alive and well.’ It indeed be very stealthy as all indices are either even or down for the year. I call that stealthy, wouldn’t you?
• You quasi-government at work. Fannie & Freddie are off the NYSE and being traded OTC. Both traded not that long ago at $50-60 per share and have fallen to penny stocks.
• Banks in Great Britain will be regulated by a triumvirate headed by the Bank of England. 
• Dow is 700 points lower than April high. Each time it falls lower on bad news and is unable to recoup previous high on rebounds. With thin volume and entering earning season we may see this as the pattern for the summer.
• Tesla preparing IPO may price around $15 a share. (That’s the new electric car semi-promoted by Toyota.).
• Going once, going twice…The Argentinean MercadoLibre (The South American E Bay), saw its top institutional holder unload $41 million in shares.
• Showtime with Congress people getting face time telling off BP big shots. Torquemada would be proud. BP CEO sidelined  Friday for someone with a personality.
• According to Chuck Jaffe at MarketWatch, the government is not going to limit the size of banks. Suitability standards for bank brokers may also not pass. Client needs will come secondary to the firm. (Lobbyist's are working hard to weaken any new regulations while opening loop holes to take advantage of.)
• Fed officials are signaling, according to Tuesday’s WSJ story, interest rates will be kept low for a really extended period of time. Inflation not a concern the economy & productivity is. RBS position paper stated with the fall of the euro by 20% the dollar was the world’s main safe haven.
• Friday closed up. Yep. Two up weeks in a row. Be still my beating heart. Michigan loses #1 unemployment spot to Nevada. Gold up on a flurry of speculation – can anyone say, ‘Look out below?’

If you have questions call Paul at 877 783 7080 or write him at pstanley@westminsterfinancial.com. Share this blog with someone who cares about their money.