August 18, 2014 – August 22, 2014
To begin the week, U.S. stocks jumped higher as geopolitics stayed contained. The Dow powered up triple digits, and the S&P jumped ahead by 16 points, NASDAQ hit a new 14-year high, reversing the entire 3.7 percent decline it made this summer. The housing market index came in at a very solid 55, up 2 points from July for the best reading in seven months.
On Tuesday markets finished even higher, with the S&P approaching a new record. Investors grew more optimistic as economic reports offered a benign view on inflation. The consumer price index was up 0.1 percent in July, below forecasts. But housing starts for July posted a sharp 15.7 percent jump, suggesting the housing recovery is back on track. It’s more apparent that the housing market has changed, however, single-family housing is no longer as attractive financially as before.
On Wednesday stocks gained for a third straight day, the Dow and the S&P continued their march upward, despite a report from the Fed about raising interest rates. According to minutes released from FOMC’s latest meeting, the majority of federal policymakers believe the U.S. economy is improving enough that the bank should consider how it’s going to start raising interest rates, which have been near zero since 2008.
But good economic reports and optimism that the Federal Reserve will keep supporting a strengthening economy sent the S&P to fresh new highs on Thursday to only 10 points away from the 2,000 milestone. Existing home sales in July was encouraging for the housing market, rising 2.4 percent. Jobless claims fell 14,000 to a better-than-expected 298,000. PMI Manufacturing Index also came in very strong at 58 for the August flash reading, this indicates growing strength for the economy’s leading sector. The market was really in a sweet spot for U.S. stocks with the 4 day rally but on Friday, stocks opened lower as investors look to the speech by Fed’s Chair Janet Yellen for cues on the timing of higher interest rates.
Now let’s take a look at some stocks:
Major e-commerce website Amazon.com (NASDAQ: AMZN) made a big step towards increasing their global presence after the company announced that they have signed a deal with Chinese officials to allow the e-commerce company to start business in Shanghai’s new free-trade zone. The new deal will now allow Amazon to compete with the Chinese e-commerce giant Alibaba’s IPO Bonanza. No details yet on how much it would cost Amazon to set up the operations in Shanghai.
Bank of America (NYSE: BAC) is set to pay a record settlement of nearly 17 billion dollars over its mortgage lending issue and for misleading investors. Bank of America became the third Wall Street bank after JPMorgan and Citigroup to reach a multibillion-dollar agreement with the Justice Department. But Thursday’s settlement is the largest penalty a single company has ever paid the U.S. government. Nearly 60 billion dollars of legal fees plus the 17 billion dollar settlement is heading out the door of Bank of America to end multiple investigations into the bank’s mortgage-backed securities.
UPS (NYSE: UPS) made headlines this week after the company became the latest victim in yet another data breach. UPS announced that customers may have had their credit card and debit card information stolen through a virus that was discovered on systems at 51 stores in 24 different states. UPS said the stolen information includes customer names and credit card numbers from about 100,000 transactions. A spokesperson for UPS said the problem is now fixed and the breach won’t have any material financial impact on the company.