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The big news of the week caused a big upward movement in equity values. Despite economic announcements pointing toward a further slowdown at home and abroad, it was the announcement by EU leaders of an agreement to allow member countries to relax harsh austerity measures that flavored market moves.
"Nearly two in three Americans think President Barack Obama is better suited than Republican rival Mitt Romney to deal with an alien invasion, according to a survey released Wednesday."
Washington economic experts have been proclaiming that economic recovery is right around the corner since before they were sure the patient was sick.
"High frequency traders using computers to flip stock in a fraction of a second may be generating as much as 42 per cent of all trades in Canadian stocks."
Last week, Microchip manufacturer Intel Corporation (NASDAQ:INTC) suffered a 1.5% weekly decline, when it closed at $26.93 on Friday. The stock is currently up 9.7% for the year.
Last week Comverse Technology, Inc. (CTI) (NASDAQ:CMVT) appeared to have arrested its downward trajectory by eking out a second consecutive weekly gain. Closing at $5.78 on Friday, the stock rose by 0.6% in the course of the week, providing a much welcomed respite from a decline which first began in late March when it peaked at $6.87. Since then, it has fallen by over 16%. CTI is also currently down 14.9% for the year.
"Much of the debate about American unemployment has focused on why companies have moved factories overseas, but only 8 percent of the American work force is in manufacturing, according to the Bureau of Labor Statistics. Job growth has for decades been led by service-related work, and any recovery with real legs, labor experts say, will be powered and sustained by this segment of the economy."
Forest Oil Corporation (NYSE:FST) continued its downward trajectory since peaking above the $39 level in February 2011. Currently down 47.5% for the year, the stock witnessed a precipitous decline 47.8% since early May this year. The independent oil and gas production company, with a market cap of $820 million, has been trading around $6.22 - $7.00 in the past two weeks. The stock closed at $6.96 last Friday, marking a weekly decline of 4.5%.
Last Thursday, biopharmaceutical company Onyx Pharmaceuticals, Inc. (NASDAQ:ONXX) enjoyed a dramatic 44% single-day gain to close at $63.78. 23 million shares were traded that day, about 15 times the daily average. Topping off this stunning performance, the stock went on to gain another 3% on Friday to close at $65.67. During intra-day trading on Friday, Onyx even reached a 10-year high of $67.29, not bad for a stock that has been trading around $37 to $43 in the past three months.
"It is very hard to see how Greece can actually meet the conditions that have been set,” he said. “The Germans are absolutely determined not to modify those conditions. One has to now calculate on Greece being forced out of the euro.”"
The biggest maker of thin-film solar panels First Solar, Inc. (NASDAQ:FSLR) continued its upward trajectory last week after bottoming out at $11.43 on 4 June. Closing at $15.88 on Friday which represented a 13.8% weekly gain, the solar module manufacturer is now trying to reclaim lost ground after peaking at $49 in February. (The stock is currently down 51.7% for the year.)
Last week, Facebook (NASDAQ:FB) finally gained some respite from a spate of bad news and poor stock performance. The social network delivered a second consecutive weekly gain, by closing at $33.05 on Friday (a 10.1% gain). While this is still below its IPO price of $38, investors are now hoping that this could be the start of better things to come, after having the stock consistently trading below $30 for much of June. After all, the company also made some progress on its legal issues. It is reportedly in settlement talks with Yahoo Inc. over a patent dispute.
Fast food company Burger King Holdings, Inc. (NYSE:BKW) went public earlier last week, after going private in late 2010. Rather than going through the IPO route, the company was listed in the NYSE through a merger with an existing public stock, Justice Holdings, a UK investment firm that previously traded on the LSE. (3G Capital, which is Burger King’s private ownership group, received US$1.4 billion from Justice Holdings for a minority stake in BKW, while Justice Holdings suspends its stock and changes its name to Burger King Worldwide and then re-list in the NYSE.
"Gold stocks are now as cheap as they’ve been for their entire decade-plus secular bull. This unloved and forgotten sector has seen its stock prices beaten so low that it is now a value play today, something literally unheard of in the gold-stock world."
"But when the Big Four met in Rome on Friday, the France's new president, Francois Hollande, was brutally at odds. Hollande said it should not take 10 years to introduce euro bonds, and he directly challenged Merkel to give ground now on key issues in exchange for her fiscal union. Or as Hollande put it, "There can be no transfer of sovereignty if there is not an improvement in solidarity."
"With the traditional summer break approaching and all sides keen for a period of calm after the frenzied events of the past months, a few weeks' respite is possible but it will not be long before the real state of the government is clear."
"Experts said it was a step towards establishing shared eurobonds, where debt from across the single currency area is shared and effectively underwritten by Germany."
"One reason for holding off on QE3 or even a large twist extension just now (although it's a close call) is that the Fed has typically waited to react to soft spots in markets and the economy in QE1, QE2, the twist, and the USD swap funding
arrangement."
“Over the past few weeks as the gold market advanced, the gold equities – that is, large cap gold miners – performed better than bullion,” he explains. “I watch that sort of thing to see how efficient and how well entrenched the gold rally is.”
Last week, social games provider Zynga (NASDAQ:ZNGA) suffered an 8.1% weekly loss to close at $5.56, a performance which could have been worse if not for the 10.6% single-day gain on Friday. Friday’s gains also came about after several Wall Street analysts, such as those from JP Morgan, Evercore Partners and Lazard Capital, reiterated their bullish ratings on the stock. Lazard even described the recent sell-off as “overdone”.
Mirroring most stocks’ performances last week, Groupon (NASDAQ:GRPN) closed at $10.06 (a 6.5% drop for the week), although it, like many others, managed to secure a single-day 6.7% gain on Friday. However, with the stock currently down 53% for the year and valued at $6.5 billion, analysts are not optimistic about the online deals site, as compared to other social media companies. Indeed, gone were the days when Google offered nearly $6 billion to buy the company in the fall of 2010.
Last week, Frontier Communications Corporation (NASDAQ:FTR), a provider of voice, data and video services to residential, business and wholesale customers especially those in the rural areas, continued its upward trajectory to close at $3.93, marking a 13.9% weekly gain. While the stock appears to have recovered from its doldrums in mid-May when it reached a record low of $3.06, it is also 18% below the recent peak of $4.78 set in mid-February.
"Greece will therefore remain in its downward austerity/recession spiral. As the government is forced to implement further austerity, social unrest will rise and opposition to additional retrenchment by MPs will cause the government to collapse by the end of this year. Greece has entered a new period characterized by such a cycle of elections, additional austerity, social unrest and new elections. Increasingly squeezed by austerity measures, the Greek electorate will eventually put in place a government willing to consider alternatives to the current path of retrenchment and bailouts and will choose to exit the EZ."
Facebook Inc. (NASDAQ:FB) finally had a brief respite from sliding stock prices when it delivered a 10.7% weekly gain, primarily brought about by a 6.1% single-day gain on Friday. Closing at $30, the stock is 21% down from its IPO price, although it also represents a 17.6% gain from its all-time low of $25.52 in early June.
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