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Euro Zone Crisis Bulls vs. Bears Above Five Hundo
Euro-Zone Crisis What will happen? Billion Euros of New Loans 2. Bridge Loan of 14 Billion Euros 3. Greek Defaults
Give them the loans + Solves immediate problem - Increases debt to GDP ratio Don’t give them the loans + Improve debt to GDP ratio - Greece defaults March 20th Find money to get the debt to GDP down to 120% + Solves immediate problem & Improves GDP - Where do you get the money?
Bridge Loan Bridge loan to cover the 14 billion Euro payment on March 20 th Bridge loan to pay the banks off in the private-sector debt reduction + Solves Immediate Problem - Increases debt - Rewards hedge funds & gives incentive to once again bet against Greece - Banks lose credibility
Outright Default: An outright inability or refusal to repay creditors Selective Default: borrower stops making interest or principal payments on some debts
New policy changing legal standing so not labeled as a “default” Credit Default Swap (CDS) investors unable to collect? Large amount of lawsuit cases?
Where is it headed? DJIA at high since 2008
1370 is the number to watch High in May 2011 then dropped
Technical level hard to break through China and the rest of the world slowing will pull US market down 1200 could happen on news of EU
Unemployment rate at lows of 2008 Market moves more on momentum than it used to Market trending upwards Low volatility If market breaks 1370 we could see it keep going until around 1440
Stocks off to the Races? Airtime: Thurs. Feb | 5:00 PM ET
$ Billion Passed Exon Mobile ( Billion) making Apple the largest company via Market Cap Due to Brand Loyalty?
Apple is relatively cheap according to its PE Ratio. (≈14) Ratio says it could be above $600 and next year close to $700
iPad 3 HD iPhone 5 4G or 4G LTE iTV announcement MacBook Air Refresh All could boost earnings
Apple is sitting on $98 billion
However, two-thirds of their cash is offshore
Safety cushion Plans on using it such as capital spending, being strategic with how they purchase their components, and then possible dividends One downside of Apple saving so much cash is that they could become a political target
Apple Hits $500 Stop at Min 7:00 Mon 13 Feb 12 | 12:00 PM ET
Bears Stock price increase only due to talk of products, stock split, or dividends Stock holders want a 3% dividend but may only receive 1% Most of Apple’s revenue comes from iPhone and competition is catching up 40% of US buys have moved to smartphones For 1 st time buyers, 3 out of 5 are choosing Android Bulls Installed fan base Non one wants to sell Apple stock Apply opened up their supply chain Paying a dividend will attract new people to the stock Products are going to get better More corporations are opening up to Apple computer and products
Most aggressive business execution in the history of business Not using android as offensive play, its defensive If you are a carrier or a handset manufacturer, they will share the search and app store splits with you You make money by using their product(what will this do to apple) If they can control OS around search they can protect that core business
Tech Stocks on Fire Fri 03 Feb 12 | 12:51 PM ET