Exchange news. Last week the market was mostly influenced by the reports about income of European countries, which were followed by various rumours and comments of top-officials from financial sector. At this point, the plan of economic recovery is very general, but market is certain that it will be effective and will help Europe to recover from crisis. The plans will be further regarded during European Union summits. The first part of the summit was held during this weekend, and the second one, which is expected even more, will be held in the middle of this week.
S&P 500 index has risen by another 1% during the previous week. Last Tuesday Germany and France increased their stabilization funds, which had positive reaction from stock exchang.
Moreover, many large companies issued their reports during the previous week. In general, the reports of the third quarter are rather promising: two thirds of companies had higher “earnings per share” than expected. However, the market was not single-minded about it.
Here follow some of the week results: on Monday IBM had better report than expected, but went down in the best countries rating. Its shares dropped by 4 % on Tuesday, having the total weekly decline by 3.5%. At the same time, S&P 500 shares have risen by 1.2%. Apple (AAPL) also had better report than expected and promised to demonstrate even higher growth during the 4th quarter. This optimism may have been caused by the extreme success of the new smartphone iPhone 4S, which is at high demand.
Financial sphere paid most attention to two banks, City © and Wells Fargo (WFC). The former had a very good report, and its shares have risen by 7%, whereas the letter had bed report, and immediately lost 8%. The report of the Bank of America (BAC) was good, the one of Goldman Sachs (GS) – rather week; however, both banks have demonstrated steady growth, which has resulted into the rise of financial sector by 1.8%. Predictions concerning the bank sector mostly bear little optimism, but the worries get weaker due to the growth of “good” credits and evidently smaller loss.
Industrial sector helps to make sure that the rumours about the second wave of crisis are vastly exaggerated. W. W. Grainger (GWW), Parker Hannifin (PH), CSX (CSX), Union Pacific (UNP), and Honeywell (HON) have all had much better results than expected.
More reports are yet to come. This week the market will be mostly influenced by hundreds of reports from large-scale companies, such as Visa (V), Moody’s (MCO), and others.
Investors are expecting the results of the second summit; therefore no drastic decisions are yet taken. Further market trends will largely depend on the taken decisions.
According to the Department of Portfolio Investments, the general expectations remain positive, and the market hopes that European crisis will not spread further. Anyway, one has to keep a close eye on the situation in order to catch the right moment to form a position. Watch-list for the week:
