The Dow Jones Industrial Average slipped 0.1% this week and is up 11.2% year to date and the S&P 500 dropped 0.4% this week and is up 16.1% in 2012.
Links Worth Snacking On:
- Chart of the Week – In the iPhone 5 era, check out its financial impact across Planet Earth
- Financial Post – This NHL lockout is not making us happy…See whose bottom lines are really going to be affected though
- Blog Maverick – Mark Cuban’s opinions on high-frequency traders
- Financial Times – The world’s most expensive take-out order ever
- The New York Times – Made in USA…sold in China?
- Bloomberg – Dubai’s got some cool buildings…Now Turkey wants a piece of the insane luxury banking market
Chips. La-Z-Boy. A rich IPA aroma wafting up from our flannel pajama pants. Like you, we’re enjoying the start of the football-watching season in our living rooms. And speaking of homes, this past week was all about US housing data – but good news from America’s home market was cancelled out by concerns over global economic growth. After the markets shot up last week on the Federal Reserve’s stimulus news, stocks drifted flat as investors wait for the next finance-shaking event.
Go ahead – put your feet up on the couch. The National Association of Homebuilders Index showed home builders’ business confidence reached its highest measured level since ’06, when the housing market was still booming. And the National Association of Realtors reported previously owned home sales rose more than expected in August, while construction of new single family homes (the ice-cream-sundae unit of American housing data) reached its highest level in 2 years. The onslaught of positive data lifted housing stocks and may indicate a turnaround in the beleaguered housing market, whose crash was the first domino that caused the ’08 financial crisis and ensuing Great Recession. Homes are a huge part of the US economy (consumers use them as loan collateral, financial assets, and estates to pass on) and higher home values mean Americans are wealthier and more likely to spend dough.
On the flip side, investors were concerned by econ data across the world that global growth may be slowing. The number of Americans filing for unemployment claims rose by 15,000 to 382,000 total, manufacturing in China contracted for the 11th straight month and Japanese exports fell again. Although the Bank of Japan jumped into the stimulus party, joining other nations’ central banks, their decision to increase the money supply to encourage lending & growth is a sign that they’re worried.
Over in the corporate realm, Apple shares reached the psychologically significant $700 mark – iPhone 5 sales reached a record 2 million on Day 1 (ask Siri about it). The prodigy phone was released to the market Friday, allowing attention-wanting tech crazies to finally stop sleeping on Apple Store sidewalks nationwide. Bank of America is cutting 30,000 employees over 3 years (16,000 by December) to bring their workforce down to 260,000. America’s hugest bank will fall to 4th hugest after becoming too bloated leading up to the ’08 financial crisis. And Manchester United posted its 1st earnings loss since their IPO after poor playoff performance meant fewer broadcast & game day revenues (our suggestion: just make soccer a contact sport already).
Story of the Week
The one successful industry in Greece has been tourism. Now Greece has taken it one step further - visitgreekisles.com is now buygreekisles.com (couldn’t they have just set up an eBay account?). To prove to international lenders that they are serious about austerity, Greece is desperately selling some of its 6,000 islands to pay down debt. They are also selling their foreign embassies and consulates around the world, including a London Townhouse adjacent to Sir Richard Branson’s swanky pad that is expected to go for 12 million British pounds. They’re even loosening restrictions for movie productions to film at the acropolis in Athens. Will Game of Thrones take advantage of this unprecedented filming locale for season 3?
- Monday – The Fed’s Survey of Manufacturing in the Dallas Region
- Tuesday – The Fed’s Survey of Manufacturing in the Virginia Region, S&P Case-Shiller Home Price Index for July, FHFA September Consumer Confidence
- Wednesday – August New Home Sales
- Thursday – 2nd Quarter Real GDP, August Durable Goods Orders, Weekly Jobless Claims
- Friday – August Personal Income & Consumer Spending, Reuters/University of Michigan (Final) Consumer Sentiment Poll for September
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