Online marketplace eBay Inc. (NASDAQ: EBAY) fell by 2.1% last week to close at $38.82 on Friday. The stock continued its downward trajectory that began in early May. While eBay, which has a market cap of $54 billion, is currently up 27.8% for the year, fears of an imminent slowdown in e-commerce spending in the US have been putting downward pressure on its stock price.
Stock Market News
Social networking company Facebook (NASDAQ:FB) continued its downward price spiral after its IPO, closing at $27.72 on Friday, marking a 16% drop for the week. It fell again Monday to close below $27 for the first time, reinforcing views that many investors might have bought into the media hype, rather than the company’s true potential or fundamentals. Morningstar analyst James Krapfel, who advised investors to be cautious, said that the company “is likely to disappoint investors over the next 12 to 18 months.”
The Spanish government was put on the defensive last week amid growing concerns over the country’s ability to weather the economic turmoil, brought about by the state of its public finances and banking sector. On Saturday, Spanish PM Mariano Rajoy publicly reiterated his government’s commitment to stick to austerity measures “as long as is necessary”. Finance Minister Cristobal Montoro insisted to reporters that the government’s plan to curb its budget deficit was working.
A few days ago I did a promotion with Amazon.com to make the ebook version of my book Strategic Stock Trading free through Amazon.com until today at midnight. This morning the book hit the top 100 list of all free ebooks on Amazon.com.
It's a pretty amazing and humble thing for me to see this happen.
Yesterday gold and gold stocks were down even though the stock market was up. Some people were wondering what is up with that? There has been an assumption among many that the stock market correction that began over a month ago has been overdone and the market should just go up. Those people are ignoring the seriousness of the Greece debt situation and the potential of the European debt crisis to spread to Italy, Portugal, or Spain.
European and Asian economic data is weakening, but after a three week losing streak which has seen the Dow Jones Industrials slip by 6.5% firmer US economic data helped the ship steady this week, with the Dow posting a o.7% advance.
With Greece looking ever more likely to leave the Eurozone and default on its debts, the G8 meeting was hijacked by attempts to address these concerns. Unsurprisingly, the meeting came up with little more than a tacit agreement to do all in the group’s power to support Europe and the wider economy.
I got a free surprise for you at the end of this post.
Two big things have been happening over the past month. We've seen the Facebook IPO disaster and suffered through a pretty tough stock market correction. There are lessons to be had from both of these events and huge opportunities to actually profit from them.
What we are seeing in Facebook is one of the craziest things I've ever seen in the stock market, and I've seen a lot of crazy things over the years. Right now the company is engulfed in controversy and people are filing lawsuits only days after it went public and started to trade on the Nasdaq last Friday.
I just did this podcast with Jeff Pierce who runs the popular trading blog www.zentrader.ca. When I last talked with Jeff he was bullish and bonds and today the TLT 20-year Treasury Bond ETF is trading at new highs.
I got Jeff's thoughts on bonds now and the rest of the market.
Market Vectors ETF Trust (NYSE:GDX), the ETF for gold-mining stocks, fell by 1.75% last week, marking the third consecutive weekly decline. Closing at $41.62 last Friday, GDX has been on a downward trajectory since late February when it was still above the $57 level. The ETF, which is currently down 18.7% for the year, has also been down 9 of the past 11 weeks.
Amazon.com, Inc. (NASDAQ:AMZN) fell by 6% last week, closing at $213.85 on Friday. The online retailer’s stock performance over the past three months has been rather volatile, trading around $178 - $232. While Amazon is currently up 23% for the year, it has been on the decline since peaking at $232 in end April.
Oracle (NASDAQ:ORCL) continued its third consecutive weekly decline, falling by 5.15% to close at $25.61 last Friday. Oracle, which is currently down 0.7% for the year, was previously trading around $28 - $30, before falling precipitously since early May. Although the enterprise software giant’s fundamentals remain strong, its lack of a clear strategic direction thus far has not endeared it to investors in recent months.
A lightly traded ETF indexed to Greek stocks – Global X FTSE Greece 20 ETF (NYSE:GREK) - fell by 14.1% last week on worries that Greece will be forced to leave the euro zone amid political uncertainty as the country heads for another round of polls in June. Closing at $10.72 last Friday, the ETF has been on a downward trajectory since peaking at $19.40 in mid-February. In fact, GREK’s performance has been a close barometer of Greece’s economic and political conditions.
Last week, iPath S&P 500 VIX Short Term Futures ETN (NYSE:VXX) continued its upward trajectory that started in early May. On Friday, it closed at $22.40, marking a 28% gain for the week. Currently down 36% for the year, VXX fell precipitously in the first three months of this year, before trading between $16.50 and $20.50 in April. It was only on 1 May did it begin its remarkable rise of 38% over a period of less than three weeks.
The fallout from European debt, economic, and political problems again took their toll this week, as markets continued their downward lurch.
Despite Germany’s economy rebounding strongly, the Eurozone only narrowly managed to avoid a second quarter of declining economic contraction. After a 0.3% contraction in the fourth quarter of last year, Europe’s economy remained unchanged in the first quarter, helped by Germany’s 0.5% growth. France’s economy remained unchanged, while Italy and Spain both contracted (0.8% and 0.3% respectively).
I just did this fascinating interview with Ike Iossif of marketviews.tv.
Ike interviews many people each week for his Marketviews.tv website, including myself, and has them categorized by methodology. These people are many of the top thinkers and traders when it comes to the financial markets, such as people like Frank Barbera and Dan Zanger who turned less than $30,000 into millions in less than a year.
Facebook. It is going to start to trade today on the Nasdaq under the symbol FB. It has been the talk of the financial news all week and I have even gotten a few emails about it from people asking if I think they should buy it.
Most of these people remember Google. They remember that back before Google went public there were financial commentators saying that it was overvalued and that they shouldn't buy it. And of course Google went up and became one of the strongest stocks in the market.
Google Inc. (NASDAQ:GOOG) closed at $605.23 last Friday, marking a 1.4% gain for the week. The stock is currently down 5.8% for the year. After peaking at $651 in mid-April, Google has generally been on a downward trajectory, trading around $592 - $615. The stock has been trending lower after its quarterly numbers showed a decline in advertising rates and other worrisome business trends.
Tech giant Microsoft (NASDAQ:MSFT) closed at $31.16 last Friday, eking out a 0.58% gain for the week. For the past three months, Microsoft has been trading around $30 - $32.85. The stock is currently up 19.8% for the year. Microsoft last posted its quarterly earnings on 19 April, when it reported earnings of $5.1 billion or 60 cents per share, above the consensus estimate of 58 cents. Its revenue reached $17.4 billion, up 6% over the previous year.
Online social games company Zynga Inc. (NASDAQ:ZNGA) continued its decline last week, closing at $7.48, which marked a 10.2% drop for the week. On Friday, it also set a new 52-week low of $7.34. After peaking at $14.69 in early March, Zynga has been on a downward trend ever since. In the past three weeks, it has been trading below the $10 level. (Zynga went public last December at the price of $10.)
Apple Inc. (NASDAQ:AAPL) closed at $566.71 last Friday, marking a flat performance for the week. The stock has yet to recover from the $600 level, which was last reached in late April. While Apple is still up 40% for the year, it has been on a downward trajectory since the start of May. Recent trends suggest that the stock may continue to consolidate over the next few trading weeks since its recent intra-day high of $618 just after its earnings announcement in April.
The Facebook IPO saga continues to seize the public imagination. In fact, many analysts and traders are now speculating that the “jubilation” over the IPO would even outride any negative repercussions in the financial markets from developments in Europe or the JPMorgan Chase’s losses. Meanwhile, Facebook, which is already assured of becoming one of the most valuable companies when it goes public, has been on an intense marketing drive in the run-up to its expected trading launch on NASDAQ on 18 May.
Last Friday, Itau Unibanco Holding SA (NYSE:ITUB), the largest financial conglomerate in the Southern Hemisphere and the world’s 10th largest bank by market value, closed at $14.85, marking a 5.8% drop for the week. Seemingly with no end in sight, the stock has been on the decline after peaking at $21.70 in early March. The stock is also currently down 19% for the year.
Sirius XM Radio Inc. (NASDAQ:SIRI) closed at $2.16 last Friday, marking a 2.3% decline for the week. While the stock is currently up 18.7% for the year, it has been trading around $2.14-$2.40 for the past two months. Moreover, after peaking at $2.40 in early April, Sirius Radio has been declining ever since.
Last week, JPMorgan Chase & Co. (NYSE:JPM) posted a decline of 3.7%, closing at $41.75. This meant that much of the gains for the past six weeks have been erased, although the stock is still up 24.9% for the year. After peaking at $46.27 in late March, JPMorgan has been generally on a downward trajectory, though there had been occasions when it spiked above $44.
Bank of America (NYSE:BAC) continued its decline last week, closing at $7.74 on Friday, marking a 6.2% drop for the week. The stock has been on a downward trajectory since peaking at $9.93 in late March. (On the other hand, the stock remains in positive territory for the year, having risen by 41.7% since last December.)