Dow industrials bounced back from a rocky start to ride a Friday rally to a 1.4% gain for the week. This week is the fourth straight that the DJIA has seen overall returns, a mark not matched since January of this year. The S&P 500 rose by 1.1% while the NASDAQ 100 dropped by the same amount. Trading opened down this week as investor confidence was shaken following pessimistic comments made by German Chancellor Angela Merkel’s spokesperson Steffen Seibert. Seibert indicated that an agreement on a solution for the European sovereign debt crisis would likely not be reached at the EU summit planned for October 23. Markets remained volatile over the course of the week as new information was leaked on prospects for the summit. The euro recouped the losses it sustained earlier in the week on Friday as German finance minister Wolfgang Schaeuble contradicted Merkel and said that he hoped for a resolution.
A number of S&P 500 companies released third quarter earnings reports this week. The tech sector as a whole generally reported losses and missed earnings targets while a recent spate of mergers and acquisitions in the energy industry has boosted that sector. Bank of America (BAC) reported a profit of $6.2 billion while Goldman Sachs (GS) reported only their second quarterly net loss since the company went public in 1999. The market reaction to BofA’s report was mixed, however, as much of those profits were due to accounting methods and a one time sale of China Construction Bank stock.
McDonald’s (MCD) stock price rose to record heights following third-quarter earnings gains of 8.6% on the back of same-stores sales growth. By and large, big corporations returned healthy profits and are maintaining healthy balance books. Demand is still sluggish in the US market where the economy is still stagnating but many S&P 500 companies are offsetting this by increasing their exposure to overseas markets. Ultimately, while this is good for the S&P, small business owners are left at a huge disadvantage moving forward.
Bottom Line: the markets are currently in flux, waiting for any potential resolutions from this weekend’s summit. Investors are seeking clarity on recapitalization for European banks and how much Greek bondholders’ losses will affect those banks.
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Editorial Staff
Monday, October 24, 2011
Sunday, October 16, 2011
M&A Activity Review
Kinder Morgan Acquires Rival
Pipeline giant Kinder Morgan announced that it will buy rival company El Paso Corp. for $21.1 billion in cash and stock. With the acquisition, Kinder Morgan will become the largest operator of nature-gas pipelines in the United States. This deal puts increased faith in the future of natural gas a potential energy source and will catapult Kinder Morgan to the fourth largest energy company in America. Kinder Morgan recently became a public company this year and raised $2.9 Billion in its February IPO.
Groupon Strides Toward I.P.O.
Groupon, which is heading towards its public offering, expects to sell 30 million shares at about $16 to $18 a share, valuing the company at as much as $11.4 billion. Groupon hopes to break even before their public offering around November 3rd. Groupon is an internet start up that finds discounts at local restaurants and stores, and now is approaching 150 millions subscribers.
Carlyle and Blackstone Compete for Merger Market
The Carlyle Group and Blackstone were active in the merger market during the first three quarters this year, with Carlyle group completing 20 deals assessed at $4.1 billion and Blackstone signed 11 deals approximately valued at $16.9 billion. Overall data from Q3 from 2011 was up 7.4% from Q3 2010, and private equity firms completed $76.4 billion worth of deals internationally.
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Editorial Staff
Pipeline giant Kinder Morgan announced that it will buy rival company El Paso Corp. for $21.1 billion in cash and stock. With the acquisition, Kinder Morgan will become the largest operator of nature-gas pipelines in the United States. This deal puts increased faith in the future of natural gas a potential energy source and will catapult Kinder Morgan to the fourth largest energy company in America. Kinder Morgan recently became a public company this year and raised $2.9 Billion in its February IPO.
Groupon Strides Toward I.P.O.
Groupon, which is heading towards its public offering, expects to sell 30 million shares at about $16 to $18 a share, valuing the company at as much as $11.4 billion. Groupon hopes to break even before their public offering around November 3rd. Groupon is an internet start up that finds discounts at local restaurants and stores, and now is approaching 150 millions subscribers.
Carlyle and Blackstone Compete for Merger Market
The Carlyle Group and Blackstone were active in the merger market during the first three quarters this year, with Carlyle group completing 20 deals assessed at $4.1 billion and Blackstone signed 11 deals approximately valued at $16.9 billion. Overall data from Q3 from 2011 was up 7.4% from Q3 2010, and private equity firms completed $76.4 billion worth of deals internationally.
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Editorial Staff
Monday, August 15, 2011
Legal/Regulatory News
Court Cracks Down on SEC / Citigroup Case
Citigroup Case Judge Jed Rakoff of the District Court in Manhattan denied a settlement between Citigroup and the Security and Exchange Commission. Citigroups was seeking to pay $285 million to the SEC without having to admit any illegal practices. This signifies a crackdown by the courts in wanting companies to acknowledge their offenses.
Congressman Barney Frank Denies Re-Election Campaign
Barney Frank stated that he will not seek reelection in 2012. Frank was one of the longest serving members in the House of Representatives. Frank blamed the redistricting constraints that would be placed on him and the challenges were too difficult to overcome.
Icahn vs. Ackman
The court battle between Carl Icahn and William Ackman has finally ended. The two men have become wealthy due to the success of hedge funds; and their seven-year case is finally settled. Mr. Ackman and Mr. Icahn were fighting over $4.5 million suit, a minute amount in terms of their overall worth.
Rajaratnam Faces Hefty Fines and Prison Time
A federal judge convicted Raj Rajaratnam -- the former hedge fund manager and founder of the Galleon Group -- of insider trading The judge ordered Rajaratnam to pay the largest ever penalty of $92.8 million assessed against an individual; Rajaratnam was also sentenced to 11 years in prison.
Insider Trading in Denver
Denver Hedge fund manager Drew Brownstein was convicted of insider trading. Mr. Brownstein admitted to making nearly $2.5 million on an insider trading tip about Mariner Energy. Brownstein received the information from a friend, Mr. Drew Peterson, who has also pleaded guilty. The typical sentencing guidelines call for 37 to 46 months of jail time with the plea.
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Editorial Staff
Citigroup Case Judge Jed Rakoff of the District Court in Manhattan denied a settlement between Citigroup and the Security and Exchange Commission. Citigroups was seeking to pay $285 million to the SEC without having to admit any illegal practices. This signifies a crackdown by the courts in wanting companies to acknowledge their offenses.
Congressman Barney Frank Denies Re-Election Campaign
Barney Frank stated that he will not seek reelection in 2012. Frank was one of the longest serving members in the House of Representatives. Frank blamed the redistricting constraints that would be placed on him and the challenges were too difficult to overcome.
Icahn vs. Ackman
The court battle between Carl Icahn and William Ackman has finally ended. The two men have become wealthy due to the success of hedge funds; and their seven-year case is finally settled. Mr. Ackman and Mr. Icahn were fighting over $4.5 million suit, a minute amount in terms of their overall worth.
Rajaratnam Faces Hefty Fines and Prison Time
A federal judge convicted Raj Rajaratnam -- the former hedge fund manager and founder of the Galleon Group -- of insider trading The judge ordered Rajaratnam to pay the largest ever penalty of $92.8 million assessed against an individual; Rajaratnam was also sentenced to 11 years in prison.
Insider Trading in Denver
Denver Hedge fund manager Drew Brownstein was convicted of insider trading. Mr. Brownstein admitted to making nearly $2.5 million on an insider trading tip about Mariner Energy. Brownstein received the information from a friend, Mr. Drew Peterson, who has also pleaded guilty. The typical sentencing guidelines call for 37 to 46 months of jail time with the plea.
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Editorial Staff
Sunday, March 27, 2011
Sunday, March 20, 2011
Thursday, March 3, 2011
Interview with Rachel Cook
Please join Duke Business Network for an interview with Rachel Cook, a filmmaker who is making a documentary on microlending for enterprising women. Prior to being a filmmaker, Duke graduate Rachel was a trader in Chicago and New York.
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Editorial Staff
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Editorial Staff
Sunday, February 6, 2011
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