D&D Note (6-15-2012)
Investors bid up equities today before the Greeks head to the polls to elect a new government. Yesterday we had the markets gain on hope of Central Bank stimulus. The question now is have the markets once again got ahead of themselves. Even if the Greeks vote for a pro-bailout government, there might not be enough votes to form a coalition government.
While we did get more dovish signs from European Central Banks, the idea of the FED doing a full on QE3 still remains low. Rather a continuation of Operation Twist is more likely.
Even if the Eurozone does not come to their senses and create a fiscal union, some sort of banking backstop (an equivalent Euro program of the FDIC) is definitely needed to stop bank runs. Another rate cut from the ECB is the most expected action from investors.
Microsoft (MSFT) shares gained today on the news that the software company bought the enterprise social network company Yammer for $1.2 billion.
Facebook (FB) saw a 6% gain today on the back of yesterdays gain, making Thursday and Friday only the second time the company has seen back to back days of trading gains since the IPO.
If we see a pullback from recent highs next week, or the following week, should be a good opportunity to put new cash to work in the equity market. If we get signs of further easing from the Central Banks then investors should also look at Gold as a place to park some cash.
The DOW (INDU) gained 115.26 points to close at 12,767.17. The Nasdaq (COMP) gained 36.47 points to close at 2,872.80. The S&P 500 (SPX) gained 13.74 points to close at 1,342.84.
The 10-Year Note rose today pushing yields down to 1.59%.
Oil move higher by 12 cents to close at $84.03 a barrel.
Gold rose $8.50 to close at $1,628.10 an ounce.
Today D&D Investments published the full version of our “Comprehensive Long-Term American Deficit Solution,” authored by Del Lienemann, JR. C.P.A. and Trading Partner for D&D Investments.
You can read the full paper via this link: https://ddinvestments.wordpress.com/2012/06/15/fiscalcliff/
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