The Financials & Metals Review For the Week of October 24, 2011

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The Financials Review
For the week of October 24, 2011

By Frank LaMantia

Some experts think the U.S. may see another downgrade in its rating. This could bring the bears running to sell in the near future. The market has had a nice rally over the past few weeks even though the risk of Europe's default has risen. It is funny that there was a summit this weekend and yet there is no talk of the results but that leaders are half-way there. The plan was to have bond holders take losses and China is supportive that Europe will find a way to solve the problem. If they are supportive, maybe China could buy a chunk of it.

Eyes may be on Netflix's third quarter earnings because of the price increase and attempt to split up the companies video subscription service. The company could have lost over 600,000 U.S. subscribers from June through September. This could be half of their subscribers. Over $9 billion in shared wealth is estimated to have been lost due to the stock dropping over 60%. (1) Cigna is set to acquire HealthSpring for $3.8 billion and will pay a 37% premium from the stocks close of $40.16 on Friday. Cigna is getting bridge financing from Morgan Stanley. The purchase is to build up its Cignas Medicare Advantage business.(2) Caterpillar reported its third quarter earnings and showed an increase of over 40% from last year. Revenue rose to 41% from 15.7 billion and this even included the companies buy of Bucyrus International, a mining company. Some are saying that the earnings from CAT show that a recession might be unlikely. (3)

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