Posts by Deirdre Hughes
- Deirdre Hughes at Yahoo Finance7 days ago
Stock prices fell and oil prices rose Friday after reports that Ukrainian forces attacked a Russian convoy in Ukraine. Fresh concern about geopolitical tensions canceled out earlier gains for stocks, which ended the day mixed after paring much of the earlier steep losses. Before the reports from Ukraine, stocks were higher on signs the economy is improving, but not too quickly. Producer prices rose 0.1% in July, slightly less than the 0.2% economists expected. Consumer confidence, however, missed expectations, according to the Thomson Reuters/University of Michigan Consumer Sentiment Index for August.
‘Consumers are afraid’
- Deirdre Hughes at Hot Stock Minute24 days ago
Argentina has until Wednesday to avoid its second default in 13 years. President Cristina Kirchner’s government and bondholders have been locked in a standoff that took the parties all the way to the U.S. Supreme Court.
Tuesday, representatives of the Argentine government are meeting with a court-appointed mediator in New York for another round of negotiations in a last-ditch effort to resolve a standoff with creditors over debt payments.
If no agreement is reached, Argentina will be in default as of Wednesday. The biggest sticking point so far has been one group of creditors that is refusing to accept $0.30 on the dollar on Argentina’s debt obligation. Argentina claims it cannot afford the $15 billion it faces in potential debt payments.
After several weeks of relative calm to kick off the summer, the markets this past week were awakened by a fresh scare out of Europe and some comments from the Fed. Trading volume and some volatility returned. And that was likely just a preview of what investors can expect in the coming week.
ESPN has announced it will launch a “Tiger-only” channel for next week’s British Open from Royal Liverpool in England. Seems like a brilliant move, considering the lackluster ratings for the first two majors of the season and the Players Championship, all of which were missing Tiger while he recovered from back surgery. Weekend ratings for this year’s Masters – missing Tiger Woods and Phil Mickelson - were the lowest since 1957, according to Sports Media Watch. The U.S. Open saw a 46% decline from the previous year and ratings for the final round of the Players Championship were down 54% from last year.
So will ESPN3’s Tiger feed make up for the lost time viewers have had with Tiger so far this year or will it just siphon more viewers away from the main broadcast?
California this week mandated a minimum wage of at least $9 an hour, making it the third state to do so, and several more plan to follow suit. President Obama has called for Congress to raise the federal minimum wage to $10.10 an hour, but that proposal has not and is not likely to gain any traction in Washington. Why? Because there are many - like CKE Restaurants CEO Andy Puzder - who argue that "artificially” raising the minimum wage when it’s not justified by economic growth is actually detrimental to workers and the economy.
“When there’s a demand for labor, the cost of labor goes up. When there’s no demand for labor, it goes down and you can’t solve that problem by having the government artificially mandate a wage increase when there’s no economic growth to support that,” says Puzder. “What businesses do is they increase their prices and they move to automation so you have less jobs.”
Happy 4th of July, Wall Street. Now, brace for turbulence. Market watcher and political strategist Greg Valliere of Potomac Research Group says the chance the market will hit some “air pockets” in the second half of the year is rising.
Stocks have been on a tear in the first sixth months of the year, with the S&P repeatedly hitting new record highs and Dow 17,000 in the conversation. And by most, if not all, accounts the economy is now expanding, despite a sharp decline in first quarter GDP. More recent evidence – including strong reports on manufacturing activity and private sector job growth – points to accelerating economic growth. Valliere believes the 2.9% decline in GDP in the first quarter is “ancient history” and the economy is on track for stronger growth in the next three quarters. “I think we’re now going into a new glide path: 3% to 3-1/2% GDP,” he says. And “we had better, because I think stocks are priced for 3% to 3-1/2% GDP. I think that’s already in the market.”
Valliere says that while the fundamentals of the economy still look strong, there are three big potential trouble spots the markets will need to keep a close watch on in the second half of the year.
- Deirdre Hughes at Hot Stock Minute1 mth ago
Private employers added 281,000 jobs in June, according to giant payroll processor ADP. The gains are the most jobs added in a month since November 2012 and far better than the 213,000 jobs economists were expecting. The number of private-sector construction jobs added in June was the most since February 2006.
The report comes just one day ahead of the government’s monthly jobs report, which will be released on Thursday this week instead of the traditional first Friday of the month due to the July 4th holiday. Economists expect to see about 211,000 jobs added in the month of June.
The jobs report will be especially closely watched after surprisingly weak economic growth in the first quarter. Q1 GDP declined 2.9% in the first three months of year.
Federal Reserve Chair Janet Yellen is expected to address economic growth and jobs when she speaks today before the International Monetary Fund about monetary policy and financial stability.
- Deirdre Hughes at DailyTicker1 mth ago
The U.S. men’s soccer team enters the single elimination round of the World Cup against Belgium next Tuesday. But this isn't the only American brand facing a make or break week in the days ahead.
Embattled retailer American Apparel (APP) could be on death-watch as well, thanks to a British company calling in a $10 million debt. The call follows a vote to oust the company’s controversial founder and CEO.
“There was a covenant in [the loan agreement] that, if the CEO Dov Charney got replaced or got ousted, as is the case in American Apparel, they could call their debt in,” explains Jeff Macke. “Well, they did and they gave a July 4th deadline, which seems kind of spiteful and selfish.”
- Deirdre Hughes at Breakout1 mth ago
Gold prices could be headed lower, at least in the short term. Sam Stovall of S&P Capital IQ believes gold has to retest recent lows, before it can continue the rally it’s seen so far this year.
“[Gold] prices did break through its zone of resistance at 1,275 to about 1,300 and now it’s coming back and I think it needs to go through a re-testing process,” said Stovall. “Our belief is that it is on an upward trajectory, but it does have to go through this re-test and we would look to about $1,260 for gold prices to be an important level of consideration.”
Stovall also points out that investors have had an atypical reaction to the recent geopolitical tensions rising between Iraq and Syria. “Gold also is a safe haven and so increased tensions usually help gold,” he said. “You would have thought that with Syria bombing Iraq, killing 50 people on Tuesday that that would have been a concern, but oil prices actually headed lower on that day, so I think the markets were sort of casting that aside… as being the start of a much bigger concern.”
- Deirdre Hughes at Daily Ticker2 mths ago
Retailer American Apparel (APP) voted late Wednesday to oust its highly-controversial founder Dov Charney. In a statement, the company said Charney was removed as Chairman of the Board effective immediately. The board also moved to fire Charney as CEO and President pending the outcome of an ongoing investigation into alleged misconduct. The company said he will be terminated for cause after a contractually-required 30-day warning period.
Charney has been the subject of multiple sexual harassment lawsuits over many years. A former employee accused Charney of being a “sexual predator” who kept her as a teenage sex slave, according to Reuters.