The Financials Review
For the week of July 25, 2011
By Frank LaMantia
Again, the top news is the debt ceiling issue. Congress will be bickering over tax hikes, take breaks, and slashing the budget. The one thing both Democrats and Republicans can agree on is that a budget deficit and long term plan is needed to keep the United States from being downgraded in the future. For the short term, the debt ceiling has a date of August 2 and the ceiling supposedly needs to be raised or Standard & Poor's will downgrade the U.S. debt from AAA. What happens if China does not get paid? Waiting until the deadline may not be the smartest thing and it shows a weakness in the egos of our government officials. The market is selling off in the premarket today, the S&P down over 11 points and the Dow is down 100 points. The chance of default in this trader's opinion is low and the market should bounce back quickly by midweek. Is August 2 the real deadline? How do we know?
Netflix is not sharing as much information as in the past, which has Wall Street concerned. The company announced that in 2012 it will not report gross subscriber additions and subscriber costs. This has analysts concerned because at this point it is difficult to see how much growth is left in the company. CBS believes its revenue will increase because of its content deal with Netflix. The company also said that it may have a deal with Amazon on content in the near future. TD Ameritrade is thinking about purchasing rival E*Trade Financial, which does not mean the company will take an offer. Citadel, the online company's biggest shareholder, has insisted that it look to sell its business.
*Chart courtesy Gecko Software
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