D&D Note (5-3-2012) – Facebook Prices IPO and Sets IPO Date

D&D Note (5-3-2012)

What will be the hottest IPO since Google (GOOG) is the upcoming IPO of Facebook.  The social networking site set the IPO price range at $28 – $35. If valued at the high end of $35 that would value the company at 75 billion which is less than the expected $100 billion. -The IPO date is set for May 18th.

The odds are high that on opening day the stock could rise to that $100 billion valuation. D&D is not in the IPO and will wait for the chart to develop and sees the same development as the Google IPO where the stock popped then retreated over the next few weeks to then only zoom higher from there. It will be in that retreat of stock price is where the post IPO buy single will be produced.

Jobless claims that came in today improved. The reading came in at 365k last week opposed to the estimate of 375k. Which is a positive sign.

Last year there where 86 million Americans who didn’t have a job and were not looking for one – these people are not counted in our unemployment numbers. And of that number 6 million claim they want a job although haven’t looked in the last four weeks – if they all decided to start looking for work it would push unemployment up to 11%.

Needless to say, everything hangs on the monthly job numbers that come out Friday. While the market always keeps a close eye on this monthly figure, the FED will be watching even closer to the April and May numbers. If we see declines that will bode for more easing by the Central bank. However, if we see any signs of improvement that will cause the FED to stay put.

Today the service sector reading declined causing downward pressure on the markets. The ISM (Institute of Supply Management’s Service index) fell to 53.5 from 56.

Markets all fell today.  The DOW falling 61 points, Nasdaq falling 35 points, and the S&P 500 fell 10 points.

Interestingly it appears many investors are taking gains in assets such as Apple (AAPL) and Gold to raise cash for the upcoming Facebook IPO. Which is obviously adding additional pressure on those two assets.

Another key data point to be released on May 15th is the inflation reading (CPI) which is the gauge the FED uses to monitor inflation.

Gold has seen a recent selloff and needs to hold above $1,613 on Friday to keep the bull case intact.

In Alt Investing news the Edvard Munch’s painting “The Scream”  sold for $119 million at the Sotheby’s auction.  This alternative asset purchase highlights how investors are finding new ways to put money to work. Like Gold, art has become a new “currency hedge.”