USA MARKET

US economy

• The Congressional Budget Office has warned that the US economy would contract at an annual rate of 1.3% in the first half of 2013 if lawmakers allow tax cuts to expire and government spending cuts to take effect in Jan 2012. This scenario, referred to as the “fiscal cliff”, is likely if the impasse in Congress continues as it did last year over the statutory borrowing limit which, by the way, will be the key topic shortly after the Nov 2012 Presidential election. Of direct concern to investors, the fiscal cliff will see a rise in tax on dividends and capital gains. [More]
• Sales of previously occupied home rose 3.4% in Apr 2012 to an annual rate of 4.62m homes – the first rise in 3 months, and the highest level since May 2010. The median sales price also rose to $177,400, up more than 10% since last year. [More]

Commodities

• Gold Futures (Jun): down $12.10 to $1,576/oz
• Oil Futures (WTI LSC Jun): down $0.91 to $91.66/barrel

Treasury yields

• 30-year: 2.87%
• 10-year: 1.77%
• 5-year: 0.76%

Share market indices

• S+P 500: 1,317 +0.06%
• DJIA: 12,503 -0.01%
• NASDAQ: 2,839 -0.29%

Tech stock news

• Reuters reports that the lead bankers/underwriters for the Facebook IPO (Morgan Stanley, JPMorgan Chase and Goldman Sachs) cut their forecasts during the IPO roadshow following an amended filing to the SEC on 9 May 2012. [More]. Facebook [NASDAQ:FB] continued its decline with an early morning low of $30.90, followed by buying action and then a selloff for the remainder of the day closing down 8.90% at $31.00 (down 18.4% on the $38 IPO price). Zynga [NASDAQ:ZNGA] fell 4.09% to $6.80.
• Dell [NASDAQ:DELL] fell 12.7% to $13.16 in after hours trading following its disappointing earnings report for FY2012 (EPS $0.55) and outlook for 2013 (EPS $0.43).

Tech stock price movements

• Tech investors were in a selling mood all day today, mainly on concerns that Greece will leave the eurozone and the consequences of that scenario. Any price rises occurred early in pre-market trading or within the first hour of trading – based on home sales and economic optimism – but solid price decline across the tech sector set in for the remainder of the day.
• Substantial rises (more than 2.0%)
  • LinkedIn [NYSE:LNKD]: up 4.64% to $101.33
• Substantial falls (more than 2.0%)
  • Facebook [NASDAQ:FB]: down 8.90% to $31.00
  • ClearWire [NASDAQ:CLWR]: down 8.3% to $1.30
  • Yelp [NYSE:YELP]: down 6.74% to $18.00
  • Netflix [NASDAQ:NFLX]: down 5.62% to $57.71
  • Zynga [NASDAQ:ZNGA]: down 4.09% to $6.80
  • RIM [NASDAQ:RIMM]: down 3.83% to $11.06
  • Groupon [NASDAQ:GRPN]: down 3.55% to $11.95
  • Advanced Micro Devices [NYSE:AMD]: down 2.22% to $6.16
  • Google [NASDAQ:GOOG]: down 2.17% to $600.80

PORTFOLIO

NASDAQ

• Apple [AAPL] $556.97 -0.77%
• Amazon [AMZN] $215.33 -1.27%
• Google [GOOG] $600.08 -2.17%

NYSE

• Linkedin [LNKD] $101.33 +4.64%
• VMware [VMW] $100.89 -0.47%

AUSTRALIAN CURRENCY

Australia is the world’s happiest nation according to the Organization for Economic Cooperation and Development (OECD). This assessment is based on income, jobs, housing and health. That assessment doesn’t agree with local assessments that most Australians are worried and feel financial insecure – this sentiment driving the restraint in consumer spending and the rise in household savings ratio.

Portfolio valuation rate: AUD1.00 = USD 0.9846

Australian exchange rates