Equities gyrated this week: Up on news that the Fed will increase rates “later this year” and at a slower pace than originally expected and down on continued worry that Greece may default on its debt and/or be forced out of the euro zone. We will find out more on the plight of the Greek finance issue tomorrow as European Union leaders will discuss the impending June 30 deadline for debt re-payment. Both sides are far apart and standing firm. As for the Fed, the central bankers held interest rates steady as they reduced their view on economic growth. The Federal Reserve is now looking for 1.8%-2.0% growth in domestic GDP this year, down sharply from their March projection of 2.3%-2.7%. As the saga continues as to when and to what extent, interest hikes will temporally shake equities, but movement out of Treasuries could find some stock buying as an investment replacement. At the end of the day, the Dow managed a decent 117 point gain on the week and the S&P 500 rose in tandem, both higher by about 0.7%. The NASDAQ jumped 1.3% and the small cap Russell 2000 by nearly 1.6%. With the exception of shares in oil and gas stocks, all major sectors were higher led by healthcare and consumer staples. Oil prices remained steady at $$59.61/bbl. from a week ago, but gold move higher by over $22/oz. to settle above $1,200/oz. Merger and acquisitions are hot topics again, especially in the pharmaceutical and health insurance sectors. With the exception of the European meeting, not much significant economic news is on the calendar for the upcoming week. In the meantime, enjoy Father’s Day.
Here is the answer to last week’s trivia question: QUALCOMM, one of the first cell phone manufacturers and developer of the Palm operating system, sold its mobile phone manufacturing division in 2000 to: Nokia, Motorola, Kyocera or Samsung? Answer: Japanese handset maker Kyocera Corporation, now only a minor player in the highly-competitive handset marketplace.
Today’s Trivia Question: On April 9 of what year did the Securities and Exchange Commission order all stocks to be traded in dollar decimals (e.g. 12.5 cents) vs. fractions of a point (1/8)? 2001, 1995, 2004 or 1989?