After flirting with the milestone for the past few weeks, the S&P 500 finally topped its all-time closing high in morning trading today. The benchmark index climbed roughly 3 points to 1565.58, inching just beyond its record closing high of 1565.15 reached in October of 2007. 

 

Despite the new record, trading was relatively stagnant on Thursday as investors were busy watching the ongoing crisis in Cyprus and mulling over fresh economic data in the domestic markets. The NASDAQ, S&P 500 and the Dow Jones Industrial Average were all up between .1 and .2 percent during trading hours. 

 

That said, the first quarter of this year has been far from boring. The Dow, which has been enjoying record highs since early March, is up a staggering 11.5 percent and poised to secure its best first quarter since 1998; the S&P 500 is up almost 10 percent; and the NASDAQ is up roughly 8 percent. 

 

Despite the success, experts argue that valuations remain attractive for domestic stocks. The S&P is trading at just 16 times its 2012 earnings, compared to roughly 17 times profits for the period it reached its previous high in October of 2007. 

 

Volume is expected to remain low today, ahead of Good Friday, when markets will be closed throughout the United States and the majority of Europe. 

 

Banks in Cyprus reopened this morning after being shut down since March 16th. The island nation is planning to limit the amount of funds depositors can withdraw in an attempt to prevent a run on banks. In addition to shrinking its banking sector for a 10 billion European Union bailout, the nation agreed earlier this week to raise billions of euros from large depositors at the Popular Bank of Cyprus and at the Bank of Cyprus. 

Meanwhile in the United States, the Federal Government released weekly data on the initial jobless claims and the fourth quarter GDP tally. 

 

Jobless claims in the United States totaled 357,000 in the week that ended on the 23rd of March, which is an increase of 16,000 from the prior week. The forecast called for a total of 335,000 based on a consensus of economists and industry professionals. 

The government report for the fourth-quarter GDP revealed an annual increase of 0.4 percent, which was slightly better than the expected increase of 0.3 percent. 

 

 

Source: Associated Press

Banks in Cyprus reopened today for the first time in nearly two weeks. The reopening was met with strict limits on cash withdrawals as authorities are attempting to prevent a run on the island nation’s bank following a bailout by the European Union. 

Cyprus became the first Eurozone nation since the currency was launched on the 1st of January 1999, to place restrictions on how much money companies and individuals can take across its borders. 

 

Cyprus banks had been closed since the 16th of March when it became clear that deposits would be raided as a condition of the bailout. The island nation was brought to the cusp of collapse and a possible exit from the Eurozone after its two largest banks—Popular Bank and the bank of Cyprus—took massive losses on Greek government debt, wiping out over a third of their combined capital. 

 

Following months of negotiations, the banks signed up for a bailout from its Eurozone partners worth roughly 60% of the island nation’s gross domestic product. 

 

In return for the bailout, Cyprus is committed to raising billions from leading depositors to recapitalize the Bank of Cyprus and the winding down of Popular Bank. The European Union wants the island nation to shrink its banking industry by 50 percent by 2018. 

 

Deposits above 100,000 euros were frozen at both big banks since the 16th of March. These deposits may be wiped out entirely at Popular while 40 percent may be converted into equity at the Bank of Cyprus. 

 

Deposits of less than 100,000 euros are guaranteed at all Cyprus banks. Moreover, the bailout will not impact smaller banks in Cyprus, which account for roughly 60 percent of the nation’s total deposits of 68 billion euros. 

 

Many of these deposits belong to foreign investors, specifically Russians, and authorities in Cyprus fear an uncontrolled flight of funds that would cause the economy to collapse. 

 

The use of austerity controls breaks new ground for the European Union, which was established on the principle of free movement of payments and capital. Many economists and those close to the situation argue that a partial collapse of the Eurozone is underway because a Euro held in Cyprus is no longer worth the same amount as a Euro held in Germany. 

 

In addition to the limits placed on withdrawals, debit and credit use abroad has been capped at 5,000 euros per month, and individuals leaving the island nation may only take 3,000 euros in cash each trip. 

 

Federal investigators, on Friday, charged Michael Steinberg of SAC Capital with securities fraud to which he pleaded not guilty. 

 

The high-ranking trader at SAC Capital—the powerful hedge fund run by multi-billionaire Steve Cohen is at the center of an insider trading investigation—was formally charged with securities on Friday, according to the Federal Government of the United States. 

 

Mr. Steinberg, a prominent portfolio manager with the hedge fund is facing five counts—including securities fraud—for allegedly short-selling tech stocks Nvidia and Dell based on inside information, according to documents for the U.S. Attorney’s Office for the Southern District of New York.

 

Steinberg pleaded not guilty in federal court and posted bail of $3 million. The trader’s next court date is set for May 3rd. 

 

“As alleged, Mr. Steinberg was another Wall Street insider who fed off a corrupt trail of confidential information cultivated by other professionals who created their own rules to make obscene amounts of money,” said U.S. Attorney Preet Bharara. 

 

Steinberg was arrested at 6 in the morning at his Manhattan residence; FBI officials claim that Steinberg was at the center of an elite criminal circle, where corruption and cheating were rewarded with million-dollar payouts. 

 

Steinberg’s lawyer, Barry Berke insists that the Wall Street trader is innocent. “Mr. Steinberg did nothing wrong; his trading decisions were based on detailed analysis and information that he understood had been legitimately obtained through the channels that institutional investors rely upon.” 

 

The charges of securities fraud come on the heels of a settlement reached on March 15th of this year between the Securities and Exchange Commission and SEC. 

On March 15th, two sectors of SAC Capital agreed to pay $614 million to the SEC to settle insider trading charges. The settlement, which was the largest in SEC history, required hedge fund advisory firm CR Intrinsic Investors to pay roughly $600 million in fines for making $275 million in illegal profits or to avoid losses and Sigma Capital to pay $14 million for trading based on nonpublic information.

 

The SEC stated that Steinberg worked at Sigma, where he allegedly received illegal tips from an analyst who is being charged by the U.S. Attorney’s office as being a co-conspirator. The SEC claims that Steinberg’s “illegal conduct” netted north of $6 million in profits and avoided significant losses. 

 

The investigation focused on conversations from 2008 between the analyst and Steinberg. The indictment accuses the analyst of telling Steinberg that an employee at Dell warned him the company was going to miss its earnings projections, prompting Steinberg to sell short 30,000 shares before the stock dropped 13 percent. 

The analyst allegedly emailed Steinberg saying, “please keep this information to yourself,” to which Steinberg replied, “Yes, we would never divulge information like this, so please be discreet.”

 

Steve Cohen, the founder of SAC Capital, has not charged, though investigators have been circling him for months, looking for signs of insider trading. 

 

 

Source: Associated Press

 

French President Francois Hollande is reviving calls for a 75 percent top income tax rate for the wealthy. 

 

President Hollande altered his failed proposal for a 75 percent top tax rate this week to shift the burden of payment from individuals to companies that pay salaries over 1 million euros. 

 

President Hollande, during last year’s presidential campaign, proposed the 75 percent tax rate on individuals earning at least 1 million euros per year; however, the proposal was ultimately rejected by the nation’s judiciary body. 

 

Following rejection, Hollande created a new payroll tax proposal on large salaries during a late night television appearance. Hollande claimed the measure is mandatory to ensure transparency at large businesses, which seemingly are the only companies that can afford to pay employees such a hefty salary. 

 

President Hollande’s initial proposal, which never was enforced, inspired French actor Gerard Depardieu to leave the country and renounce his citizenship. Depardieu, who now holds a Russian citizenship and lives in Belgium, is a cultural icon in France, and his departure triggered a firestorm of public comment for and against him. 

 

In the United States, the Democratic Party has also raised the argument that the wealthy should pay higher taxes as a matter of equality and fairness. As part of the fiscal cliff deal during the beginning of this year, the top marginal tax rate on income was allowed to revert to the pre-2001 level of 39.6 percent. 

 

President Hollande’s popularity has taken a drastic hit during the recent months, and the embattled leader used the television broadcast earlier this week to urge for more reforms. 

 

The proposal comes at an awkward time as the French economy, which is second in size only to Germany in the euro-zone, has stagnated. Several economists stated earlier this month that France’s performance in the first quarter of this year was shaping up to be the worst since 2009. 

 

“The widespread weakness across manufacturing leaves little room for hope, with a range of indicators from backlogs, new orders, output prices and employment all residing at depressed levels,” said economist Jack Kennedy. 

 

The nation of Germany, by contrast, saw increased improvement in business activity last month for a third consecutive month. Kennedy claims the gap in performance between the Eurozone’s healthiest economies was at its widest margin since surveys began in the early stages of 1998. Kennedy believes that France is begging to look like it belongs on the periphery of the Eurozone’s strong economies, rather than at the core. 

 

Source: CNN

 

 

An additional half a billion dollars has been returned to the victims of Bernard Madoff’s Ponzi scheme. 

 

Roughly $506 million was returned to victims of the Ponzi scheme according to a Monday press release by the Securities Investor Protection Corporation and the office of trustee Irving Picard.

 

This now means that a total of $5.44 billion has been returned to victims since Madoff’s monumental scam was uncovered. 

 

However, more than four year after Madoff’s conviction over two-thirds of the stolen funds are either unaccounted for, or are yet to be returned to duped investors. 

 

Federal investigators claim that $17.5 billion was lost to Madoff’s Ponzi scheme, which crumbled with his arrest in December of 2008. Since then, investigators have recovered assets, including a yacht, jewelry and property and have reached settlements totaling nearly $9.2 billion. 

 

That said, many of the victims are still awaiting a settlement, and have yet to receive compensation for Madoff’s illegal activity. The trustee associated with the case claim that 1,106 accounts have been fully reimbursed out of a total 2,178 victims. 

 

Bernard Madoff, the mastermind behind the record-setting scheme is languishing in a federal prison in Butner, North Carolina. Mr. Madoff pleaded guilty in March of 2009 to running the massive Ponzi scheme, and as a result, was sentenced to 150 years without the opportunity for parole. 

 

Madoff’s brother Peter recently began 10-year prison sentence for aiding in the concealment of the scheme. 

 

Source: Associated Press

 

Tesla Motors is on the verge of reporting its first-ever quarterly profit following strong sales of its all-electric Model S. 

 

The announcement was a strong sign for the green motor company, pushing shares nearly 16 percent higher during Monday’s trading hours. 

 

“There have been a number of automotive startups over the past several decades; however, profitability is what makes a company legitimate,” said co-founder and CEO Elon Musk in a statement released late Sunday night. “The Telsa motor company is here to stay, and we will keep fighting for the electric car revolution.” 

 

The electric motor company expected to sell 4,500 units of the Model S during the first quarter, but sales surpassed the 4,750 unit mark this weekend. In response to the strong numbers, the company amended its first-quarter guidance. 

 

That said, Tesla might expect even bigger news later this week as Musk in a late night tweet, alluded to an announcement that will be “more important.”

 

The profitable quarter follows a disappointing final quarter of 2012, when Tesla reported a $75 million loss. 

 

The Tesla Model S is a full-size, four-door luxury sports vehicle that was unveiled in 2009, but did not become publicly available until the latter portion of 2012. Thus far, the company has sold roughly 10,000 electric cars to customers in 30 countries. 

 

The weekend’s positive news also came with an announcement that Tesla has decided to terminate production of its entry-level sedan, which sold for approximately $60,000. This scrapped vehicle was equipped with the smallest battery on the electric line; the 40-kilowatt hour model would deliver a range of only about 160 miles.

 

Tesla, with the scrapping of the entry-level model, is sticking with their larger 60 kilowatt hour battery option. The larger vehicle allows a range of closer to 235 miles and sells for roughly $62,400 following a $7,500 federal tax credit. 

 

In the announcement, Musk also thanked customers for continued support; those individuals that purchased the Model S in recent months did so even after the vehicle received scathing reviews from the New York Times and other media outlets. 

Although the Model S has been subject to negative reviews, the vehicle has received acclaim from other venues, including from both Automobile Magazine and Motor Trend. 

 

Source: Associated Press

Major automakers recorded another solid month of car and truck sales, kicking off the crucial spring selling season on a positive note. 

 

Ford motor, General Motors, and Chrysler Group posed domestic sales gains of 5 percent or better while Toyota Motor sales edged up 1 percent from a year ago. The Chrysler Group posted its strongest sales figures since December of 2007.

 

Sales throughout the auto industry are poised to beat expectations and rise above the 15 million yearly sales rates for the fifth straight month. This positive news comes after the industry went nearly five years without reaching this benchmark goal. 

 

“American consumers are quite confident in the economy, with bad weather and sequesters not deterring them the slightest bit,” said Michelle Krebs, a senior analyst with Edmunds. “The picture is the same as it always has been: a pent-up demand from older vehicles is unleashing credit is available at marginal rates, and new products are resonating with the consumer base.”

 

The four largest automakers were roughly in line with sales expectations for the month of March. Ford and GM both reported much stronger sales for SUVs, pickups and crossover vehicles than they did for compact or traditional cars while Chrysler’s Ram truck unit also posted strong sales numbers. These metrics could be a sign that lower March gas prices boosted truck sales for the month of March.

 

GM claims the rebound in the housing market also helped propel truck sales. Purchases by small businesses, including building contractors, increased by roughly 15,000 vehicles at GM, accounting for a 32 percent boost compared to 2012 sales figures. The jump in home sales and corresponding home prices are allowing contractors to start building new homes at a greater pace than at any time in the previous five years. 

 

Source: AP

Mortgaging financing giant Fannie Mae reported a record profit of $17.2 billion in 2012, symbolizing the improvement experienced by the housing market over the course of the last five years. 

 

Just a couple years ago, the U.S. government was forced to intervene and take control of Fannie Mae, which was nearly crippled by deep losses from foreclosures and plunging real estate prices after the market’s bubble burst in 2007.

 

2012 was the first full year profit reported by Fannie Mae since 2006, and marked a legitimate turnaround from the $16.9 billion loss it posted for 2011.

 

The profitable year also means that Fannie Mae is ready to pay tens of billions of dollars in dividends to the government in what may turn out to be its largest repayment since the $116 bailout offered by the federal government to rescue the mortgage giant. 

Fannie Mae’s improvement in results is a direct result from a sharp decrease in losses on its loan portfolio. This significant drop was due to the fact foreclosures and delinquencies on the mortgages it backs have declined in sizeable numbers. 

Fannie Mae said it anticipates its “earnings to remain strong over the next several years.”

 

The domestic real estate market has enjoyed a substantial recovery as decreased mortgage rates and a shrinking supply of real estate has combined to boost home sales and prices. 

 

In addition to these favorable metrics, a settlement payout from Bank of America also boosted Fannie’s 2012 pre-tax income by over $1.3 billion. Bank of America paid the mortgage financier $3.6 billion in a settlement over risky mortgages that Countrywide Financial sold Fannie during the real estate bubble. Countrywide was then purchased by Bank of America. 

 

Fannie Mae’s profit in 2012 was more than twice the company’s previous record of $8 billion in 2003. The mortgage lender’s $7.6 billion profit during the final quarter of 2012 also represented its best 3-month run in the company’s history. 

 

Improvements in Fannie’s profit margins is fantastic news for American taxpayers as Fannie pays dividends to the U.S. treasury on shares the government owns. Dividend payments totaled over $11.5 billion 2012 and over $4 billion in 2013, bringing total payments to the treasury north of $33.5 billion. 

 

Another benefit to taxpayers is that Fannie Mae’s increased profitability opens the for the lender to use an accounting treatment to reinstate previous tax credits worth nearly $60 billion, which it can further use to pay the Federal Government. 

 

Source: CNN

 

The booming enthusiasm for firearms is propelling a vibrant job market for the manufacturing of ammunition and firearms. 

 

Guns and ammo are selling at a fast clip these days, and that means ammunition makers are hiring. In fact, some manufacturers are scrambling to find enough workers to meet their increased demand. 

 

Mike Weddle, Senior Vice President at Dynamic Research Technologies, a small ammunition manufacturer in Missouri says he is adding ten new workers to his staff of 35. Dynamic Research Technology’s machine operators make roughly $15 an hour, which amounts to a decent paycheck in a region where it is difficult to find a job and the cost of living is relatively meager. 

 

Dynamic Research Technologies cranks out roughly 80,000 bullets per shift and operates two shifts per day; however, that is not enough to meet its surging demand. In response to the boom in demand, Weddle is adding a third manufacturing shift and building an additional facility. 

 

“Demand quadrupled last year; it just went crazy,” he said. 

 

Dynamic Research Technologies is just a fraction of an industry that employs roughly 240,000 workers throughout the United States. And similar to the Dynamic Research, the bulk of the giants in the business are also hiring. 

 

Smith & Wesson and Sturm Ruger have both added manufacturing posts in the past year. In addition to surging demand, these companies are benefiting from the fact that they are based in regions of upstate New York and New England where manufacturing has disappeared. 

 

That said, these companies require highly-skilled workers, which propels competition among gun manufacturers for top-notch hires. The most sought-out workers are engineers who have the ability to create unique gun-designs that inspire gun enthusiasts to make a new purchase for their gun collection. 

 

New features include triggers with innovative safeties, ergonomic frames or side-mounted laser sights to give new guns a competitive edge. Engineers with the necessary design skills to create these new guns can easily earn over $100,000 a year. 

 

Many industry professionals agree that finding skilled workers is the biggest hurdle for the business, which has a massive 18-month backlog of orders. “Finding skilled machinists and highly-skilled labor is one of the most significant problems that we face in getting products out of the door,” said Jacob Herman, chief operating officer for Red Jacket Firearms. 

 

 

Source: Associated Press

Florida Gulf Coast apparel sales are soaring on the heels of the basketball team’s unparalleled success in this year’s NCAA Division I National Tournament. 

The Florida Gulf Coast Eagles are the biggest surprise in this year’s NCAA Tournament, and thanks to this success, is now suddenly the hottest school with regards to fan interest as well. 

 

Sales for apparel at the school’s on campus book store surged over 1,000 percent on Saturday, following the basketball team’s upset victory over Georgetown in the first round of the NCAA tournament. The 1,000 percent increase from a year ago was detailed in a report from the Follett Higher Education Group. Follett is a private company that is responsible for managing more than 900 university stores, including the shop at Florida Gulf Coast University. 

 

The Florida Gulf Coast University on campus book store was closed on Sunday, but online sales went crazy as the school upset San Diego state to become the first 15th seed to advance to the Sweet 16. Susan Evans, the school’s vice president said the online store handled over 500 clothing orders starting at 4 PM compared to the typical 25 to 30 a day. 

 

Mrs. Evans said the store was being mobbed by fans purchasing clothing on Monday, although figures have not been made available just yet. “We are pretty much selling everything that is not bolted to the floor,” she said. 

 

The media attention is clearly helping the school; by now, you probably have heard that head coach Andy Enfield was a former tech entrepreneur and is married to a supermodel who has graced the pages of Sports Illustrated and Maxim. 

 

The teams exciting style of play, featuring an up-tempo office and ferocious dunks, have won it an army of new fans. 

 

Stores located near the school’s campus in Fort Myers are also rushing to procure the clothing on their shelves. According the Licensing Resource Group, which manages merchandise for more than 180 colleges in the United States and national retailers, such as Dick’s Sporting Goods, Lids and Target all placed orders for Florida Gulf Coast University goods earlier today. 

 

“The increased demand will give Florida Gulf Coast University a tremendous lift off campus,” said Lewis Hardy, CEO of the Licensing Resource Group. 

 

Evans said that her school, which has graduated only 15,000 students in its short history, had its most successful alumni events during this weekend’s games. Moreover, the school’s Web page for prospective students had a 500 percent increase in unique visitors on Sunday alone. 

 

Florida Gulf Coast’s next game is late Friday night against the University of Florida, and even if the darling’s Cinderella run ends that night, Evans is optimistic that the newfound interest in the school can persist. 

 

 

Source: CNN