Uncertainty in Southern Europe continues to plague other euro-zone economies, despite the ECB’s pledge to buy an unlimited quantity of struggling countries’ government bonds. According to the European Commission, consumer confidence hit a 40-month low in September and most experts expect the euro-zone recession to worsen this year. The French PMI fell 4 points this month, marking one of the largest slides in recent history.
In Greece, the country is facing yet another budget shortfall. A report, to be released in October, will produce an estimate of this most recent Greek deficit. At that time, the ECB, IMF, and the euro-zone governments will have to determine how they will proceed with the Greek bailout plan and who will be forced to alleviate some of the Greek debt. Without greater concessions, Greece could go bankrupt as early as November and send the euro-zone into another possible crisis.
In Spain, the government is in talks with the ECB over a potential bailout and any conditions that would come along with said bailout. Additionally, the Spanish economy received a much-needed boost this past Thursday when it sold a significant amount of long-dated debt to foreign investors. This move has given Spain greater fiscal freedom to tackle some of its recent financial problems.
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Brandon Nesfield
Showing posts with label Greece. Show all posts
Showing posts with label Greece. Show all posts
Monday, October 1, 2012
Friday, February 24, 2012
Market Recap (Feb. 24)
In a holiday-shortened trading week, the Dow Jones Industrial Average (DJIA) ended up 0.26% for the week at 12982.95. The index constantly flirted with the symbolically significant 13000 mark, even going over it a few times in day trading, but did not close once above it. The NASDAQ Composite and the S&P 500 both continued to rise as well, finishing up 0.41% and 0.33% respectively for the week.
On February 21st, Eurogroup officials delivered a long term refinancing option for Greece that included a large haircut of 53.5% for private bondholders and the option for creditors to swap into new bonds with a maturity of 30 years. Investors responded positively towards this new LTRO which, pending bondholder cooperation, should reduce Greece's debt by 107 billion euros and avoid a massive default when 14.4 billion euros worth of Greek bonds come due on March 20th.
Crude oil futures finished the week at $109.87 per barrel, indicating that gas prices will soon eclipse the dangerous $4 per gallon benchmark. Several commodities analysts reported on the possibility of crude reaching $130 per barrel by this August, near the record highs of Summer 2008.
Investors were heartened by the Labor Departments latest report that initial jobless benefit claims for the week were unchanged at 351,000 (the lowest since March 2008) and the four week average fell to 359,000, the lowest in four years.
In terms of fourth quarter earnings reports, Hewlett-Packards woes continued as they announced a 44% year over year drop in profits to $1.5 billion. Retail stocks performed relatively well this week with Target leading the pack on the back of better than expected 4Q earnings. AIG reported earnings of 82 cents per share that far outpaced analyst estimates of 62 cents per share, sending its stock price up. The company enjoyed a $17.7 billion gain due to the release of the allowance of deferred tax asset valuation.
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Editorial Staff
On February 21st, Eurogroup officials delivered a long term refinancing option for Greece that included a large haircut of 53.5% for private bondholders and the option for creditors to swap into new bonds with a maturity of 30 years. Investors responded positively towards this new LTRO which, pending bondholder cooperation, should reduce Greece's debt by 107 billion euros and avoid a massive default when 14.4 billion euros worth of Greek bonds come due on March 20th.
Crude oil futures finished the week at $109.87 per barrel, indicating that gas prices will soon eclipse the dangerous $4 per gallon benchmark. Several commodities analysts reported on the possibility of crude reaching $130 per barrel by this August, near the record highs of Summer 2008.
Investors were heartened by the Labor Departments latest report that initial jobless benefit claims for the week were unchanged at 351,000 (the lowest since March 2008) and the four week average fell to 359,000, the lowest in four years.
In terms of fourth quarter earnings reports, Hewlett-Packards woes continued as they announced a 44% year over year drop in profits to $1.5 billion. Retail stocks performed relatively well this week with Target leading the pack on the back of better than expected 4Q earnings. AIG reported earnings of 82 cents per share that far outpaced analyst estimates of 62 cents per share, sending its stock price up. The company enjoyed a $17.7 billion gain due to the release of the allowance of deferred tax asset valuation.
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Editorial Staff
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