June 23, 2014 – June 27, 2014
Overall, the market had some slight profit taking this week, however, it didn’t change much overall, remaining close to record highs. On Monday, the PMI Manufacturing Index Flash report for June was 57.5, up from May’s 56.2, with a strong new orders component. Existing home sales for May were up 4.9% month-to-month, but were down 5% compared to a year ago.
On Tuesday, some violence in Iraq erupted putting a damper on the mood, however, new home sales were released for May showing an enormous surge of 18.6% month to month, and the largest monthly increase in 22 years. The Case-Shiller Home Price Index for April rose 10.8% year over year and 1.1% month to month and the Consumer Confidence report for June increased to 85.2, up from 83, approaching new recovery highs.
On Wednesday, durable goods orders for May were down 1%, much weaker than expected after rising .8% in April. The revision for the 1st quarter 2014 GDP was released and it was a real shocker, showing a decline in the economy of 2.9%. However, the effects of the bad winter weather are old news and markets closed up.
On Thursday, markets slipped when James Bullard of the St. Louis Federal Reserve Bank predicted that interest rates will rise early next year. This was contradictory to what Fed Chair Yellen has said. Jobless claims for the week ending June 21 were 312,000, down 2,000 from the previous week. Personal income for May rose .4%, consumer spending was up .2%, and the PCE price index for inflation measurement was up .2%.
Now let’s take a look at some stocks.
General Electric (NYSE: GE) shares slumped just over 2% this week after the company announced they will acquire Alstom’s, a French rail and energy company, for $17 billion. This ends their bidding war against Siemens and Mitsubishi Heavy Industries for the business. The acquisition is accompanied with a list of clauses, including the protection of Alstom’s 18,000 French-based employees as well as the establishment of three joint venture companies.
Last Tuesday, Microsoft (NASDAQ: MSFT) unveiled their Nokia X2, the follow-up to Nokia’s X and officially the first cell phone to be released by Microsoft after acquiring Nokia’s handset business. The X2 features a larger screen, longer battery life, twice the RAM and most surprising, an Android operating system with a user interface that looks almost the same as a Windows smartphone. Microsoft stated that the X2 was considered a stepping stone for Nokia (NYSE: NOK), bringing more users to their cloud through pre-installed applications.
New York Attorney General announced last Wednesday that charges will be filed against Barclays (NYSE: BCS), over fraudulent activities in the bank’s dark pool market. The lawsuit alleges that the British bank was favoring high-frequency traders.
GoPro, Inc. (NASDAQ: GPRO) the sports camera maker, made its debut Thursday in the US market after it setting its IPO price at $24 and opening at $28.65. The company raised approximately $427 million with a total market cap at $3 billion and intends on using the IPO funds to buy out some investors and to pay off $120 million in debt.