Ja Rule once said “baby girl put it on me” – And if we’ve learned anything from one of history’s classiest rappers, it’s always to find the light in a dark time. The US economic recovery may have slowed during 2012 so far, but the August stock market has been giving Americans and Patrick Bateman-types alike something to be happy about. After rallying since July, stocks took a breather and drifted down this past week, finishing negative every day until Friday.
Act I. Monday….Action. And plenty of action there was. PC users clutched their Bill Gates machines in disgust, as rival Apple became the largest public company of all time (Steve jobs would have put on a golden turtle neck with a smug smile if he was still with us). Apple passed Microsoft’s 1999 record with a company value of over $630 billion. Rumors of a September iPhone 5 launch, a new iPad mini and a possible iTV have investors pouring money into the stock like free chocolate syrup at Pinkberry. Best Buy founder & former CEO Richard Schulze has been trying to save his company by buying back the shares in order to defend it like he’s guarding Gotham, but his buyback was rejected by the Board of Directors. Best Buy has been struggling from competition from this new thing called “the internet” where users can buy the same products they play with in the store, for less.
Remember when Justin Timberlake told Marky Z to drop the “the” in The Social Network? Well there’s been a lot of dropping this week – of Facebook stock that is (see what we did there?). Early Facebook investors who were locked into holding onto their shares for a while were finally able to drop them like they were hot…or cold. After shooting up 5% on Monday, the stock retreated back down 5% as Pay-Pal inventor and original investor Peter Thiel sold 80% of his shares. “Dis-like button.” It was a sad week for tech companies as Dell and HP both missed earnings estimates for the 2nd quarter. The tech giants are big market movers so when they struggle, investors lose faith in similar tech firms IBM and Microsoft.
The Federal Reserve FOMC minutes were released and were red hot hot hot. Details of the most recent Fed policy meeting revealed 2 members openly expressed opposing views about further stimulus measures for the struggling US economy – all is not well in the Real World Fed Reserve. The minutes hinted that most voting members favored a QE3 which made investors all tingly inside.
And as for US econ data, the number of Americans filing for unemployment may have ticked up for the 2nd week in a row, but investors were psyched as the number of existing homes sold in the real estate market rose 2.3% compared to June and 10.4% more than July of last year. Home sales are so important to the US economy because they are the biggest purchase the average consumer can make and the ripple effects are huge for the local economies. This had a positive effect on home construction companies that were pleased to see home prices were on the rise as well. Now, it’s time for a vacationy pre-Labor Day week with Ben Bernanke’s big speech on Friday live from Jackson Hole Wyoming.
The Dow Jones Industrial Average inched down 0.9% for the week and is up 7.7% year to date and the S&P 500 sank 0.5% this week as well and is up 12.2% in 2012
Links Worth Snacking On:
- Blog Maverick – Billionaire bro Mark Cuban weighs in on the connection between new education developments and the job market
- Wall Street Oasis – The finance interview…how do you respond to “Tell me about yourself?”
- Bloomberg – A nice little business analysis of why Abercrombie & Fitch is falling hard on its half-naked face
- Yahoo! Finance – Tootsie Roll isn’t just the world’s most interesting public company…it’s also the sketchiest and most top-secret
- The Wall Street Journal – How a major insurance company got smacked in the face by Twitter
- Wall Street Oasis – How do banking careers look like after 5-10 working on the street?
- Charts – Ahead of the upcoming political party conventions, check out the Return on Investment (ROI) of corporate lobbying
- Monday – Dallas regional Fed Manufacturing Survey
- Tuesday – S&P/Case Shiller June Home Price Index
- Wednesday – 2nd Quarter Real GDP, July Pending Home Sales
- Thursday – Weekly Jobless Claims, July Personal Income and Consumer Spending numbers
- Friday – Bernanke’s Fed speech from Wyoming, July Factory Orders and the Reuters/University of Michigan Consumer Sentiment poll for August
© 2012 MarketSnacks