US Finance World

Stocks declined at the end of a lackluster week as investors already on edge about global growth became concerned that China could take steps to brake its economy’s expansion.

The Dow Jones Industrial Average fell 90.52 points, or 0.80%, to 11192.58, its lowest level since Nov. 2, the day of the U.S. Congressional elections. The Dow fell 2.2% for the week.

Stocks have surrendered all of their gains since Republicans seized control of the House of Representatives and the Federal Reserve announced its much-anticipated bond-buying program.

The Nasdaq Composite fell 37.31, or 1.46% to 2518.21. The Nasdaq shed 2.4% for the week, ending a string of five consecutive weekly gains. The Standard & Poor’s 500-stock index fell 14.33, or 1.18% to 1199.21 on Friday, also breaking a five-week winning streak.

Asian markets fell on Friday as concerns resurfaced that the Chinese government would further tighten monetary policy to counter inflation.

The benchmark Shanghai Composite Index fell 5.2%, erasing nearly a quarter of its three-month upswing. Read more…

Gold prices are extremely high. While I am a believer one should hold a modest amount of gold in a portfolio (10% or less), it is a commodity whose rise plays, in large part, on structural weaknesses in currency and economies. As history shows, an economy with solid fundamentals (rule of law, productive citizens, abundant resources) eventually gets back on their feet and, with it, a general decline in gold prices as capital shifts elsewhere.

If you believe that gold is now too expensive to take too much profit going forward or the credit crisis has merely accelerated the shift of geo-political power and wealth to Asia, one possible play as a hard asset, which also couples as a play on China, is iron ore.

Iron ore, in a very simplistic sense, are a certain type of rock required to produce iron (I am not a geologist so this is very dumbed down). Iron constitutes 95% of all metal production.  Pig iron is key to steel production.

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Before we get into this weeks round-up, just wanted to remind everyone that we are giving away a copy of The RESP Book so make sure you enter!

Carnivals

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Article by Ray

Ray is an ex-financial adviser and the founder of Financial Highway. Currently working in the financial industry and working towards completing his Chartered Financial Analyst, CFA, designation.

Stocks fell Tuesday as investors became increasingly concerned about the potential impacts of the Federal Reserve’s stimulus plans announced last week.

The Dow Jones Industrial Average dropped 60.09 points, or 0.53%, to 11346.75. Bank of America was the measure’s weakest performer, off 33 cents, or 2.6%, to $12.27. Despite its plans to sell 25% more shares of BlackRock than it intended, the banking giant at this point remains short of the amount of capital it is supposed to have raised by a year-end deadline.

Chevron also weighed on the Dow with a drop of 1.24, or 1.5%, to 83.56 after the energy giant agreed to pay $3.2 billion in cash and assume $1.1 billion in debt to purchase Atlas Energy. Atlas shareholders will receive $38.25 a share in cash, a premium of 21% over its Monday closing price. Shares of Atlas, which isn’t a Dow component, surged 10.78, or 34%, to 42.50.

The Nasdaq Composite lost 17.07, or 0.66%, to 2562.98. The Standard & Poor’s 500-stock index shed 9.85, or 0.81%, to 1213.40.

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Congratulations to Eva who won a copy of The RESP Book. I’ll have one more draw before year end so stay tuned.

Quantitative easing is economic political correctness for printing more money. After printing billions of money, the Federal Reserve has announced another round of quantitative easing last week. Specifically, the Federal Reserve will be purchasing mostly U.S Treasuries from individuals and institutions; the theory is that sellers of these treasurers will now have money to either spend or lend. Whether printing more money ultimately solves the economic problem remains to be seen (and I am of the school that it will not). However, there are some clear winners from quantitative easing.

The short-term winners are the banks. With interest rates so low and the Federal Reserve buying treasuries, banks can borrow money at low rates then buy treasuries knowing that the Federal Reserve will be supporting their prices. I

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Around here we’ve hit the peak of the fall yard sale season.

I headed out this weekend to check out a few and came away flabbergasted by the prices some of the sellers were charging for their stuff. I’m an informed consumer and I generally know the prices of the things I buy. I know what an item costs new, on sale, or used. And many of these sellers were charging new prices for used items. There’s nothing wrong with this if you can get that kind of money, I guess. If you can find enough suckers to buy your stuff, more power to you. The problem is that many of these people were not moving any merchandise. People were driving up, taking one look and driving away. Not exactly the recipe for a successful yard sale.

I see this on programs like Clean House, as well. People ask too much for their stuff. They think that because it’s sentimental to them, or special in some other way, that it must be worth more money. The tro

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The GM IPO is expected to raise approximately $13 billion (all figures are in USD) for the company and the taxpayers of Canada and the U.S. (both governments owe a stake in the company). With pricing of a common share set to be between $26-$29/share, the GM IPO is an eagerly awaited event for the company, underwriters and governments alike.

However, for the average investor, the rule of thumb is always avoid an IPO-unless you can miraculously find a sufficient number of shares from the issuer and flip them on day 1. But even if one were to find shares for the GM IPO, the larger question is whether investing in the auto industry is a good long term bet?

The Bureau of Transportation Statistics tracks the total number of miles driven by each type of vehicle. Passenger car mileage has fallen since 2005 in the U.S. Since this drop began pre-2008 recession, it simply cannot be argued that the drop in mileage is the by-product of a struggling economy especially since it is worth noting total passenger car mileage continued to increase during the 1991 recession.

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NEW YORK—Stocks drifted between small gains and losses, taking a breather a day after surging to two-year highs even as U.S. nonfarm payrolls increased more than expected.

The Dow Jones Industrial Average slipped 25 points, or 0.1%, to 11419 in recent trading. The measure was weighed down by Kraft Foods, which fell 2.8%. The food giant posted an 8.5% decline in third-quarter profit as higher taxes, jumps in advertising spending and costs for integrating Cadbury weighed on its shares. Also, Starbucks plans to discontinue its arrangement to use Kraft as a distributor for its coffee products.

The Dow’s financial components helped limit its decline following reports that the Federal Reserve is poised to allow healthy banks to increase dividend payments for the first time since the financial crisis. J.P. Morgan Chase climbed 2.4% and Bank of America added 1.7%.

The Nasdaq Composite slipped 0.2% to 2572. T

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