Sunday, June 27, 2010

Itz Weekend Review

Add to Technorati Favorites Subscribe in a reader

The week gone by started out with the Q1 GDP revision coming in at +2.7%, estimates had called for 3%, Q2 numbers due out July 30th. U.S. debt will top $13.6 trillion in 2010 and rise to 102% of GDP by 2015. By 2015 the interest payments alone will be more than $1 trillion a year and 30% of U.S. government revenue. On top of that the Bush tax cuts will expire and the Obama administration is most likely not going to extend them. So expect investors to take any capital gains profits before the year's out.
We did have some good news though, as Consumer Sentiment for June the number improved to 76.0 from the first June reading of 75.5, the highest since it bottomed in November of '08.
Banks stocks rallied Friday as financial regulation reform bill looks like it will pass this week. The Volcker rule is in the bill but it was watered down slightly to allow banks some leeway in trading for their own benefit. They can speculate with up to 3% of their capital in private equity and hedge funds. Banks are also allowed to deal in derivatives in order to hedge their own risk but not to speculate on risk as a trade.
The risk of a possible hurricane was credited with pushing crude oil prices +3% higher to close just under $79, helping the Itz Pix UCO position. Earnings will be in force after the Fourth of July holiday, the honeymoon is over.

Research in Motion (RIMM) reported Thursday, beating on earnings per share but disappointing on revenue and sales. The stock took a big hit - falling below the support level of $55. The company now needs to bring to market it's new OS & touch screen products and compete with Apple & Android phones if it expects to recoup it's share price. The valuation is half of Apple's but many investors believe it cannot compete as it once did. I'm giving them one more quarter to prove if they have what it takes. Don't count them out just yet, there also is rumor of a possible take over?

Itz Pix favorite performer year to date has been Silver Wheaton (SLW) which appears to be set to breaking out of resistance soon. The Point & Figure (PnF) chart has a bullish price objective of $27.50.


No comments: