Don Miller
Will New iPhone Give Boost to Verizon (NYSE: VZ) and Apple (Nasdaq: AAPL) Shares?
The buzz surrounding the long-awaited release of a Verizon Communications Inc. (NYSE: VZ) iPhone is reaching a fevered pitch as it appears the telecom giant is ready to bring the device to market.
Verizon is expected to confirm it will start providing service for the iPhone early next year, according to a report last week in The Wall Street Journal.
January may be a strange time to launch the much-anticipated product, but AT&T (NYSE: T) reportedly convinced Apple Inc. (Nasdaq: AAPL) to give it one last holiday season as the iPhone's exclusive U.S. provider, according to a report in Tech News World.
With millions of frustrated AT&T network users making noise and millions of loyal Verizon customers anticipating the iPhone's release, investors are wondering if the iPhone could give shares of both Apple and Verizon a shot in the arm.
Chinese IPOs Making Waves in the Market, but Beware of Bubbles
Record fundraising activity in the market for initial public offerings (IPOs) is pushing valuations for Chinese companies to sky-high levels, raising concerns about a possible bubble.
IPOs are likely to raise more than $300 billion for issuers worldwide in 2010, exceeding the previous record of $295 billion in 2007, despite the sluggish economic recovery in Western markets.
In the first 11 months of 2010, IPOs worldwide already raised $255.3 billion in 1,199 deals, according to a "Year-end Global IPO Update" report from Ernst & Young.
And the red-hot Asian markets, led by China, continued to lead the recovery, raising the most capital ever. Asian issuers have raised $164.5 billion so far this year – already surpassing the $98.2 billion raised in the peak fundraising year of 2006 and accounting for 64% of total global IPO value so far in 2010.
That's more than four times the $40 billion in IPOs completed by the second-ranked North American market. Europe was third, raising $32.8 billion, far outdistancing the Middle East and Africa's $5 billion.
U.S. & Euro Regulators Move to Curb Commodity Speculators
U.S. and European Union (EU) regulators are vowing to step up scrutiny on the size and volume of commodity market bets as debate continues to rage about whether excessive speculation is driving up prices on energy, metals and agricultural products.
In an unprecedented rush, investors have pushed a total of $121.2 billion into commodities since the beginning of 2009, according to Barclays Capital. Hedge funds, pension funds and mutual funds in the United States have boosted their positions on oil, silver, corn and wheat to record highs in 2010.
In some commodities, the number of futures contracts outstanding now far outpaces the numbers traded in mid-2008, when commodity market prices shattered records. As a result, regulators in the United States and Europe are considering proposals on how to prevent the so-called speculators from manipulating the markets.
Uranium Prices Surge on China's $511 Billion Investment in Nukes
China's push for energy security is igniting a boom in the country's nuclear power plant construction, rekindling demand for uranium and leading its price higher.
China held its first International Nuclear Symposium on November 24-25 in Beijing. The meeting was packed with nuclear industry heavyweights scrambling for new contracts after the Red Dragon announced its intentions to spend $511 billion to build as many as 245 reactors in the next two decades – nearly doubling previous plans.
"Money is not an issue, which is different from the rest of the world. The Chinese have the capacity to deliver and they are deadly serious about achieving it," Steve Kidd, director of strategy and research at the London-based World Nuclear Association (WNA), told Bloomberg News.
President Hu Jintao said China aims to generate at least 15% of its energy from non-fossil fuels by 2020. Although the Chinese have invested heavily in wind farms and solar arrays, nuclear power is the only source of energy that could reach his goal.
Muni-Bond Market Tumbles As Investors Demand Higher Yields on Shaky Finances
California's efforts to sell $10 billion in short-term bonds last week attracted only tepid interest, adding to concerns that some local governments are on shaky financial ground and may have to pay more to attract investors.
The widely watched sale drew interest from around the country as debate continued over whether the stability of municipal finances has been a factor in market prices. The tax-exempt bond market has been overwhelmed by a deluge of supply that has decreased demand, depressed prices and forced yields higher.
"The tax-exempt municipal bond market is a cold, cold world right now for issuers and taxpayers," Tom Dresslar, a spokesman for the California State Treasurer told The Wall Street Journal. He added that the state decided to cancel another $267.3 million bond sale it planned to price this week "in light of market conditions."
Irish Bailout Threatens to Reignite Euro Debt Crisis
Ireland's reeling banking system, and the government's reluctance to accept outside help, is threatening to reignite the European debt crisis that nearly led to the demise of the European Union (EU) and its currency last spring.
EU officials are trying to persuade Irish officials to shore up the country's devastated banking sector with a possible $100 billion (73.5 billion euros) aid package as Irish policymakers continue to insist that the financially troubled nation doesn't require a bailout.
Just six months after EU governments established a $1.02 trillion (750 billion euros) rescue fund with the International Monetary Fund (IMF) to backstop Greece and other troubled members of the 16-nation euro currency area, cracks are once again emerging in the group's financial infrastructure.
Deficit Reduction Plan Promises Painful Prescription For U.S.
A bipartisan White House commission this week announced a sweeping proposal to slash the federal deficit by hundreds of billions of dollars a year by taking aim at virtually every sacrosanct area of U.S tax and spending policy, including Social Security and Medicare, middle-class tax breaks and defense spending.
But while the proposal has enough teeth to put a real dent in the mushrooming deficit, the political reality is that it has virtually no chance of passing through a divided Congress without major changes.
"Mathematically it apparently works…[but] politcally, it is going to have a lot of trouble getting support from more than just the two co-chairs," Stan Collender, a former Democratic House and Senate budget analyst and managing director of Qorvis Communications in Washington told Bloomberg News.
Fed's Easing Spurs Treasury Purchases as Banks Shun Lending
Despite the U.S. Federal Reserve's efforts to spur lending by keeping interest rates low and pumping up liquidity with quantitative easing, banks continue to borrow from the government at low rates and reinvest the funds into higher-yielding Treasury bonds.
U.S. commercial banks are buying the most Treasury and agency debt since the Fed began tracking the data in 1950, adding $186.2 billion to their inventories through Oct. 20 bringing the total to $1.62 trillion. At the same time, commercial and industrial loans outstanding have fallen by about $68.5 billion this year to $1.23 trillion, according to central bank data compiled by Bloomberg News.
By tying up their capital in government securities, banks make it more difficult for small businesses to get loans and create jobs, which discourages consumer spending.
Fed's "QE2" Could Fuel Inflation in U.S. & Deflation in Europe
The U. S. Federal Reserve's latest round of quantitative easing (QE2) may further escalate the currency war
by producing a crippling bout of deflation in Europe and conversely, another period of inflation on the domestic front.
The diverse results are possible because further Fed purchases of debt are likely to re-ignite economic growth and increase prices in the United States, while a surging Euro will make it more difficult for European countries to pay off debt.
Fed purchases of Treasuries to stimulate the U.S. economy could send the euro rising against the dollar, sparking deflation in Europe, Nobel Prize-winning economist Robert Mundell told Bloomberg News.
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