Transcript Financial+News+Brief+2

By:
Joanna Alexander
Kathy Ratajczak
Will Prout
Courtney Potter
What practices do money market funds currently
employ?
• Provide investors with a relatively safe alternative to savings accounts by
investing in only low risk commodities
• Funds encourage investors to believe they can never lose money
What does the SEC propose to regulate?
• Require money market funds to hold capital on the offchance that there
are losses
• Require money market funds to use a floating measure of their net asset
value, making it more difficult for investors to withdraw cash
Is what the SEC proposing beneficial?
• Financial Markets held their breath on Tuesday as Italian Prime
Minister Silvio Berlusconi’s reform shy government teetered on
the brink.
• Rome has displace Athens as the epicenter of the euro zone’s
sovereign debt crisis.
• Italy’s government bond yields have approached unsustainable
levels.
• Italian 10 year borrowing costs touched a new record 6.71%
on Tuesday raising the risk that Rome’s massive debt , the 2nd
highest in Europe at 120% of GDP could spiral out of control.
Do you think a Republican or Democratic
victory effects the stock market differently?
• Stocks have rallied after every mid-term since 1942!
• Stocks surge on average 18.3% in the 200 trading days after
mid-term elections
• The S&P 500 chalked up its biggest 200 day gain, 30.5% in
1942, as the tide began to turn in WWII
• The smallest gain 3.9% came in 1946 as investors fretted that
the economy would sink into another depression
• The market has been essentially neutral about party changes in
one or both houses of Congress
• Historically it has been a good predictor of stock performance.
• Since 1940 the S&P has returned a cumulative 9.3% on
average in the first two years of presidential terms—slightly
more than a third of the 25% cumulative return in the second
two years!
• Recently though, the presidential-cycle indicator has fallen flat
• Bottom Line: Markets often find a way to upset our
preconceived notions!
• http://static5.businessinsider.com/image/4defa60c4bd7c8ba241a0000-400-300/maryschapiro.jpg
• http://www.ehow.com/about_4700550_characteristics-money-market-funds.html
• http://www.ft.com/intl/cms/s/0/bee8b3f4-0973-11e1-a2bb00144feabdc0.html#axzz1dQwEWnli
• http://finance.yahoo.com/news/Italy-Greece-on-the-brink-rb-1374006010.html
• http://www.kiplinger.com/columns/value/archive/how-elections-affect-the-stock-market.html