Week In Review
A look back at the week that was...
Sub prime worries carried over into the new week as investors feared a possible shakeup in the corporate bond market. Tuesday's cancellation of U.S. FoodService's $1.55 bln bond offering had investors questioning if the historic levels of buybacks, M&A, and private equity deals would continue. Not surprisingly, the SPX undercut its early June lows while the eldest sister, the DJIA, closed below its 50 day moving average on Tuesday for the first time in nearly three months. However, the Bulls supported the market at this critical level.
As we head into the second half of the year, investors will certainly be keeping an eye on the corporate bond market to see if the financing frenzy which has been this bull market's fire will continue. And speaking of fire, be safe this 4th of July holiday.
The "Four Sisters" Performance
The Federal Reserve kept interest rates at 5.25% as expected reiterating their concerns about inflation but dropping the term elevated from their statement. (6/28
Existing home sales fell 0.3% last month to an annualized rate of 5.99M. Inventories rose by 5% to 4.43 mln, the highest level since June 1992. (6/25)
Durable goods orders fell 2.8% against expectations of a fall of 1%. The normally volatile number shows the biggest drop since January. (6/27)
Core consumer prices which exclude food and energy increased 0.1% during May leaving the year over year index at 1.9%, inside the Fed's comfort zone. (6/29)
Bear Stearns (BSC) announced they would spend $3B to help bail out one of their hedge funds troubled by problems with sub prime mortgages.
The Senate rejected a proposed bill that would overhaul the nation's immigration laws. (6/28)
Research in Motion (RIMM) reported earnings of $1.17 a share versus estimates of $1.06 sending shares soaring. (6/28)
Nike (NKE) beat their earnings expectations by a penny. Profit increased 32% over the same period last year on gains in the and
Oracle (ORCL) reported earnings of $0.31 a share up 23% from last year. Oracle missed earnings expectations of $0.35 but beat revenue expectations. (6/26)
Walgreen's (WAG) reported earnings of $0.56 a share versus estimates of $0.54 a share as gross profit margins improve. (6/25)
Market Movers: Winners and Sinners
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