Markets Hub: How Low Can Yields Fall?

Posted by & filed under Market Analysis.

Description:  In the wake of the Federal Reserve offering a subdued assessment of the economy and signaling it’s set to keep interest rates low, Treasury yields are testing record levels. The downturn in yields is happening even in the absence of the kind of panic that’s pushed yields to historic lows in the past. The move comes as the S&P 500 continues to test critical support levels. Paul Vigna, Madeleine Lim and Michael Casey discuss.

Source:  Marketwatch.com – video report
 
Date: 06/24/2010

Link: http://www.marketwatch.com/video/asset/markets-hub-how-low-can-yields-fall/2C0E1822-BFE9-4ED5-8E14-D029ED6EC065

Questions for discussion:

  •  Summarize the reasons given for current treasury yields?
  • What is your prediction for treasuries and the stock market over the next three months?
  • Why do you think this will occur?
  • How should financial managers behave in this market?

Hit to BP’s market cap gushes past $100 billion

Posted by & filed under Company Analysis.

Description: BP shares dropped as much as 9% in London on Friday, putting the drop the oil major’s market capitalization at more than $100 billion since the Gulf of Mexico oil spill began, as an analyst suggested the company needs to sell stock to assure counterparties of its financial health.

Source:  Marketwatch.com

Date: 06/25/2010

Link: http://www.marketwatch.com/story/bp-shares-get-fresh-hammering-2010-06-25?siteid=nwtwk
 
Questions for discussion:

  • Summarize the financial situation for BP.
  • Evaluate BP as an investment for the next 12 months?
  • What could BP management do now to mitigate further erosion of its stock value?
  • What could other oil companies learn from BP’s experience?

Reliance Communications Said to Cut $3 Billion Debt Selling Towers to GTL

Posted by & filed under Company Analysis, Financial Planning.

Description: Billionaire Anil Ambani’s Reliance Communications Ltd. will cut its debt by at least $3 billion by selling its mobile-phone transmission towers, people familiar with the deal said.

Source: Bloomberg.com
 
Date: 06/27/2010

Link: http://www.bloomberg.com/news/2010-06-27/gtl-to-buy-reliance-communications-towers-to-expand-mobile-phone-network.html

Questions for discussion:

  • Summarize the transaction described in the report?
  • What were the benefits derived for each side?
  • How will cash flow be affected at Reliance?
  • Was this a “good deal” for both parties or did one side benefit more?
  • What alternatives were available to Reliance?
  • Would you have made this deal?

Dividends Are Rising. Will Stocks Follow?

Posted by & filed under Market Analysis.

Description: THE headlines about stock dividends have been remarkably bleak.

Source: NYTimes.com
 
Date: 06/25/2010

Link: http://www.nytimes.com/2010/06/27/business/27fund.html?ref=business

Questions for discussion:

  • Summarize the key points made in this article.
  • What do you think will happen to stock prices over the next 12 months?
  • How do dividend payouts influence investor thinking?

BP Halts Dividend, Earmarks $20 Billion

Posted by & filed under Company Analysis, Financial Planning, Governments & Regulators, Management Issues.

Description:  BP said it was suspending dividend payments for much of this year and created a $20 billion fund to pay injured parties. Alan Murray and Joe White discuss. Also, Steven Gillon, a presidential historian discusses Barack Obama’s leadership style in the context of other presidents who have faced serious crises.

Source:  Marketwatch.com – video report
 
Date: 06/16/2010

Link: http://www.marketwatch.com/video/asset/pm-report-bp-halts-dividend-earmarks-20-billion/D75A6C7B-A289-4237-8F30-55972C4E2363

Questions for discussion: 

  • How much will this “deal” hurt BP financially?
  • What is the significance of a dividend suspension?
  • What is your view of corporate and government responsibility in this matter?
  • Do you believe that President Obama has handled BP correctly?
  • From a risk management point of view, are there any longer term ramifications for the industry now that this ecological disaster has occurred?
  • How might you expect oil companies and governments behave in the future?

News Hub: Do Index Funds Help Diversify?

Posted by & filed under Market Analysis.

Description:  Although diversification remains a sound idea, market cap-based indexes have the perverse effect of diminishing diversification. Michael Casey explains what you can do.

Source:  Marketwatch.com – video report
 
Date: 06/16/2010

Link: http://www.marketwatch.com/video/asset/news-hub-do-index-funds-help-diversify/EA723B82-4976-41B5-9578-22F0ADAF8E49

Questions for discussion:

  • Summarize the issues related to index investing. 
  • Do you agree with the analysis presented by the commentators?
  • What would the ideal index look like to you?

RIM may be feeling the heat from Android, iPhone

Posted by & filed under Company Analysis.

Description: Though analysts still expected Research In Motion Ltd. to post strong double-digit gains in both sales and earnings for its recently-ended first fiscal quarter, there is a growing sense that the company is facing more pressure from the fast-growing lineup of new smart phones on the market.

Source:  Marketwatch.com

Date: 06/18/2010

Link: http://www.marketwatch.com/story/research-in-motion-may-see-effects-of-competition-2010-06-18
 
Questions for discussion:

  • Summarize the financial prospects for RIM?
  • Evaluate RIM as an investment for the next 12 months?

CBOE, Oasis Lead $1.15 Billion in IPOs in Biggest Week of 2010

Posted by & filed under Economic Analysis.

Description:  The market for U.S. initial public offerings showed signs of recovering this week as companies from CBOE Holdings Inc. to Oasis Petroleum Inc. sold $1.15 billion of shares in the biggest week for IPOs this year.

Source: Bloomberg.com
 
Date: 06/19/2010

Link: http://www.bloomberg.com/apps/news?pid=20601103&sid=aiuUv_LFsZDM

Questions for discussion:

  • Summarize the tone of the report?
  • What is the significance of this news?

Peddling Relief, Firms Put Debtors in a Deeper Hole

Posted by & filed under Governments & Regulators, Industry Analysis.

Description:  For the companies that promise relief to Americans confronting swelling credit card balances, these are days of lucrative opportunity.

Source: NYTimes.com
 
Date: 06/18/2010

Link: http://www.nytimes.com/2010/06/19/business/economy/19debt.html?ref=business

Questions for discussion:

  • Summarize the issues raised in this article for firms, government regulators, and the customer.
  • Do you believe more regulation by government or the financial services industry is needed?

This Week In Mutual Funds: Bonds May Come Unglued

Posted by & filed under Economic Analysis, Market Analysis.

Description: More than a few experts are convinced that massive U.S. government spending will ultimately wreak havoc with the bond market, as both the country and companies are forced to pay higher borrowing costs to satisfy creditors. Money & Investing editor Jonathan Burton reports.

Source: Marketwatch.com ╨ video report

Date: 06/11/2010

Link: http://www.marketwatch.com/video/asset/this-week-in-mutual-funds-bonds-may-come-unglued/FB20089B-0046-4818-BE91-BD13A0C21BD6

Questions for discussion:

  • Summarize the explanation for the concern over bonds.
  • Do you agree with the assessment?
  • What would you be doing if you were an investor?
  • What strategy should a financial manager be considering in this environment?