For Today, the Pain Remains in Spain - Analyst Blog
30 Maio 2012 - 6:09AM
Zacks
Stocks will likely give back some of the Tuesday gains as
concerns about Spain’s ability to manage its banking problems take
center stage. A credit rating downgrade of the country on an
otherwise slow-news day will not help either. The domestic economic
calendar is on the thin side today, as most of the top-tier
economic reports are coming out on Thursday and Friday.
The market is keenly waiting for the May non-farm payroll report
coming out Friday morning and the preview of that report in
Thursday’s reading from Automatic Data Processing
(ADP), the payroll processor.
But the spotlight today will firmly remain on Spain, whose
government announced the other day a €19 billion bailout of the
troubled bank Bankia. The government appeared to be banking on
funds from European Central Bank (ECB) for recapitalizing the bank,
but stepped back from that move after resistance from the central
bank. The government now plans to raise the funds through the
markets by auctioning treasury bonds, but its ability to achieve
that goal at competitive rates is becoming increasingly difficult
given the persistent uptrend in bond yields.
The rating downgrade by Egan-Jones Rating of the country’s
sovereign credit profile into junk category is not helpful to that
goal either. Bottom line, Spain is in the headlines for all the
wrong reasons, and that’s not good for the market today.
In corporate news, shares of BlackBerry maker Research In
Motion (RIMM) will be in focus today after the company
pre-announced a surprise loss in the current quarter on Tuesday.
The company also announced the hiring of investment bankers to help
them sort out ‘strategic alternatives.’ Given the dire straits the
company is in, it is inconceivable that any existing industry
player will step up to buy them out.
RIMM is coming out with a new version of BlackBerry this year, but
the company has been fast losing ground to competing products like
Apple’s (AAPL) iPhone and handsets that use
Google’s (GOOG) Android operating system. Earnings
estimates for the current quarter have been steadily coming down,
but the company was still expected to report positive earnings of
41 cents for the quarter, which has come down almost 40% over the
last three months.
APPLE INC (AAPL): Free Stock Analysis Report
AUTOMATIC DATA (ADP): Free Stock Analysis Report
GOOGLE INC-CL A (GOOG): Free Stock Analysis Report
RESEARCH IN MOT (RIMM): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
Automatic Data Processing (NASDAQ:ADP)
Gráfico Histórico do Ativo
De Jun 2024 até Jul 2024
Automatic Data Processing (NASDAQ:ADP)
Gráfico Histórico do Ativo
De Jul 2023 até Jul 2024