Dow: 13,208 (+0.31%) S&P 500: 1,406 (+0.22%)
Oh ye of little faith. After a week of positivity like investors were walking on sunshine, it all looked like the streak was coming to an end today. China’s trade surplus fell from $31B to $25B in July when economists expected an increase, aggravating global slowdown concerns and keeping stocks down for most of the day. Then, in the twilight of Friday pre-weekend trading, markets shot north as the Dow finished up 43 points for its 4th gain of the week (6 straight for the S&P 500). Adding to the bright side, the Treasury Department reported that the federal budget deficit narrowed the first 10 months of the government’s fiscal year thanks to higher tax collections.
Soccer’s Manchester United IPO on NYSE finishes flat
Manchester United is a storied British football club, faithfully stewarded to unmatched success since 1986 by coach (and Sir) Alex Ferguson. It’s also the only soccer team that Americans can actually name (and they only know of it because their college roommate went abroad to London and came back “like, the biggest Man-U soccer fan ever, man”). Its finances, however, have been all over the place since the serial capitalist Glazer family bought the team in ’05 with their own money and a ton of debt. The thought of the Glazer purchase of the team is met with considerable disdain by Man U fans since huge interest payments on the debt load have burdened the team and limited its ability to get the best talent. The Glazers own a bunch of sports franchises (like the Tampa Bay Bucs), but are “going public” with Man U through today’s Initial Public Offering (IPO) of the team on the New York Stock Exchange – anyone can own “MANU” now. Investors usually look at IPOs to “pop” on trading excitement their 1st day, but expectations have been lower since the bungled Facebook (FB) IPO in May. And similar to a soccer game, there wasn’t much action today – MANU finished up less than 1% on the 1st day of trading, valuing the team at $2.3BN. The Glazer family is sitting happy, still holding half the shares of MANU worth a cool $1.15 BN.
Corn prices expected to rise additional 39% this year due to drought induced crop shortage.
The damage is done for the corn harvest this year. The pollination season is over and, due to the awful draught baking most of the nation this summer, the cornfields of the heartland were as celibate as a nunnery. The US Department of Agriculture cut its forecast of the corn harvest again today. Even though more corn was planted by farmers this year than any season in the past 75 years, the harvest will be the lowest since 1995. The government is also warning us to expect higher corn prices for the next year due to the reduced supply. Pricey corn will ripple through the economy to beef and poultry prices as the commodity is needed to feed the animals we eat – it even affects gasoline since the US government requires ethanol be mixed in to gas limit pollution. A whopping 60% of America is experiencing some sort of drought conditions, but it’s making 100% of farmers and popcorn guzzling movie-goers alike nervous.
Over the weekend:
- Olympics closing ceremony on Sunday. Two things the MarketSnacks team won’t miss from the Olympics in London: the raw, uncensored male buttcrack and the seemingly photobooth-stretched faces of the male divers.
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