Stocks struggle as Fed policymakers meet
Central bankers begin 2 days of talks that could lead to new stimulus measures. US consumer confidence, home prices and personal incomes rise, but spending is unchanged.
By Andrea Tse
Stocks wavered Tuesday as investors weighed data on home prices, personal income and spending, and consumer sentiment against the possibility of more monetary easing after the latest two-day Federal Reserve meeting.
"The Federal Open Market Committee is likely to ease monetary policy . . . in response to the continued weakness of the economic data and the persistent downside risks from the crisis in Europe," said economists at Goldman Sachs. "We expect an extension of the current 'late 2014' interest rate guidance to 'mid-2015.'"
The Commerce Department reported that personal income rose 0.5% in June after increasing by an upwardly revised 0.3% in May. Personal spending was unchanged after a downwardly revised 0.1% dip in May.
Prices of single-family homes rose for a fourth straight month in May, according to S&P/Case-Shiller's index of 20 metropolitan areas. Prices gained 0.9% on a seasonally adjusted basis, topping expectations for 0.5%.
The Conference Board's consumer confidence index rose to 65.9 from a upwardly revised 62.7 in June, topping economists' expectations for a decline to 61.5, Reuters reported. June's level was originally reported as 62.BP) posted underlying replacement cost profit in the second quarter of $3.7 billion, down from $5.7 billion a year earlier. Including charges, BP reported a loss for the period of $1.4 billion. The company wrote down the value of its assets by $5 billion -- $2.7 billion for U.S. refineries and $2.1 billion for U.S. shale gas assets. It also took an additional provision of $847 million for the Gulf of Mexico oil rig disaster, bringing the total it has set aside to more than $38 billion.
Pfizer (PFE) posted second-quarter profit of 62 cents a share on revenue of $15.1 billion. Analysts had expected 54 cents a share on revenue of $14.87 billion.
Seagate Technology (STX), the hard disk drive maker, on Monday reported a non-GAAP profit of $2.41 a share in its fiscal fourth quarter on revenue of $4.48 billion, falling short of Wall Street's expectations for earnings of $2.51 a share on revenue of $4.56 billion.
Ten jurors were selected Monday in the patent battle between tech giants Apple (AAPL) and Samsung Electronics. The trial is expected to last about four weeks.
The stimulus did not work, QE 1 did not work, QE 2 did not work, but I am sure (really this time) that QE 3 will work... If not, there is always QE 4. Typical government thinking -- just throw money at the problem and things will get better. However, we all know that you can't change the fruit until you change the root.
Gasoline is going to top $5 by end of summer -- 40 percent of corn crop has been lost this year.
So much for the theory using corn to make gasoline go further by adding 10 percent ethanol to the gasoline. Quess the idiots at EPA did not realize people eat corn and that some years are like the great depression years total drought.
Also no one is saying how great our grand fathers were to make lakes and canals to save water in good rain fall years to use in bad rain fall years. 80 percent of corn would have been lost this year if not for what they did years ago.
"Spare the rod and spoil the child" - We've been sparing the rod for far too long, and now we've got a bunch of unruly, spoiled brat, TBTF corps on our hands. Like any good parent, instead of coddling TBTF and apologizing for them and giving in to their every demand, we should have been letting TBTF know their behavior is unacceptable, teaching them the difference between right and wrong, and making it painfully clear that there are consequences for their actions, including whipping their a$$ when they get too far out of line.
"GM Financial auto loans to customers with FICO scores below 660 rose from 87% of total loans in Q4 2010 to 93% in Q1 2012."
"The worse the FICO score, the bigger the increase. From Q4 2010 to Q1 2012, GM Financial loans to customers with the worst FICO scores — below 540 — shot up 79% to more than $2.3 billion. The second worst category, 540-599, rose 28% from about $3.4 billion to $4.3 billion."
"Prime loans, those above 660, dropped 42% to $676 million."
"...GM has seen its subprime loans grow from about 4.8% of sales in Q4 2010 to 8.2% in Q1 2012. The industry average is about 6%."
It looks like GM is due for a good a$$-whipping.
yeah - imagine trying to dig a Delaware cannal now? environmental impact reports, some hidden turtle, etc. glad our fore fathers had the concepts and the balls!
>>>Also no one is saying how great our grand fathers were to make lakes and canals to save water in good rain fall years to use in bad rain fall years. 80 percent of corn would have been lost this year if not for what they did years ago. <<<<
Indeed. But somebody has to buy that crap and you likely guessed it... banks are. Close the banks, save the world. I might add that NO ONE who actually lent before the Gramm Leach Bliley Act was passed subversively in 1999 (legalizing collusion in the financial sector), is still lending. If we GUT the banks, reconcile, regulate and re-open minus the alumni... we just might start recovering.
The most humorous thing I've read on here since delk disappeared.
Thanks VF, I needed a good chuckle this morning.....
We have heard relentless comments about banks and how evil they are. I would like to make a distinction here. A contributing factor in all of the chaos we are seeing is the insurance industry and the mentality and wrong assumptions many of us make about insurance. AIG for instance packaged and sold contracts ensuring amny different aspects of investments. This PONZI scheme has been around for eons. They sold policies that when entities were required to recover funds they were not there. They overpromised and fell short when it was time to deliver. The Derivitives that are the 1000 lb gorilla that will hold us back for many years to come are also part of this industry. We need to change the mindset of how we look at, buy, and monitor this Industry. Fanni Mae and Freddie Mac are also insurance entities and look at the danger they expose each of us to.. Almost all in this Industry have some sort of federal backing. I think we need to seperate the Insurance Industry apart from Banking and if we do we can see that the real villains in this impolsion are actually part of the Insurance Industry and not the banks. JMHO
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[BRIEFING.COM] The stock market finished a down week on a cautious note with small caps leading the retreat. The Russell 2000 lost 0.5%, widening its weekly decline to 2.6%, while the S&P 500 shed 0.3%. The benchmark index ended the week lower by 2.7%.
This morning, the market was provided a basis to rebound with the July employment report, which was just right for the policy doves (209K versus Briefing.com consensus 220K). It showed payroll growth that was weaker than expected, ... More
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