The Fed’s latest stimulus program, QE3, has boosted risky assets like stocks and commodities at the expense of the dollar. The greenback dropped 6.5% between late July– when investors became more certain the Fed would take action – through mid-September, a more precipitous decline than following the prior two rounds of stimulus. During that same time, the S&P 500 rose nearly 10%.
Behind the dollar’s decline was investors’ growing sense in midsummer that central banks on both sides of the Atlantic would take action. European Central Bank president Mario Draghi vowed to save the euro at all costs, sparking a rally in the currency. In the U.S., currency investors saw further stimulus by the Federal Reserve as increasingly likely and began to price in a devaluing of the dollar. As expected, the Fed launched its third round of so-called quantitative easing earlier this month, a program that will increase the money supply as the Fed buys mortgage bonds with money it has created.
Barnes and Noble’s new Nook tablets may not be quite as powerful or versatile as the iPad, but they do beat Apple in one key measure: weight.
Unveiled Tuesday, the 9-inch HD Nook is 20% lighter than the iPad, a difference that is instantly noticeable after lifting the two tablets, but feels even more pronounced when holding either device in one hand for prolonged periods. The iPad feels overweight by comparison, experts say. In fact, while the Nook and Kindle Fire tablets are getting lighter, the iPad is getting heavier: The third version of Apple’s tablet is 652 grams — more than 50 grams weightier than the iPad 2.
As American Airlines’ labor dispute with its pilots causes a blizzard’s worth of delays and cancellations, passengers are understandably frustrated. But there are ways to make the best of a flight delay – besides waving a fist at the airport departures monitor.
To quell the uproar, American has added extra staff, has canceled selected flights as early as possible and is letting customers fly standby at no extra charge, the company says. “American is endorsing tickets to other carriers, which it isn’t required to do under contract,” says Christopher Elliott, an airline-passenger advocate.
Consumers who check their credit scores don’t always see the same number that lenders see when they apply for a loan, a new report shows.
One out of five consumers who purchase their credit score will likely receive a “meaningfully different score” than a lender, according to a study released today by the Consumer Financial Protection Bureau. As a result, the CFPB says, they’re likely to end up with loan terms that are different from what they expected to get or they could waste time applying for a loan that they’re not qualified for. “This underscores what we’ve been talking about for years—there’s really no guarantee that the scores you can buy will be the same type of score the lender is looking at or that it’s even commercially available to the lender,” says John Ulzheimer, president of consumer education at SmartCredit.com, a credit monitoring site.
Home prices are rising, experts say, but not as much as some reports may suggest. And to maintain a realistic view of any real-estate recovery, it may be wise to err on the conservative side.
Prices rose by 1.2% in July over the year-earlier period, and 1.6% over the previous month, according to the S&P/Case-Shiller Home Price Index released Tuesday. Housing analysts are generally greeting this as good news, but it looks pallid compared to the most recent National Association of Realtors survey, which came out last week. That report estimated that the median sales price of existing homes rose 9.5% in the 12 months to August 2012, strongest increase since January 2006. July’s NAR report showed a similarly large gain.
Charles Schwab won headlines Friday with its promise to cut annual investment fees on its line of market-tracking exchange-traded funds. But investors hoping to score a deal still need to do the math.
The online brokerage, which began offering its own ETFs in late 2009, has always used price as a selling point. The company now plans to slash fees to levels not previously seen. For instance, the annual levy on the $890 million Schwab U.S. Large-Cap ETF (SCHX), will be cut to just $4 a year per $10,000 invested, from $8. The new rate is less than half the $10 a year charged by the widely followed $118 billion SPDR (SPY), which tracks the same slice of the stock market. ”We want to offer investors the lowest-cost solution,” says Schwab’s Managing Director of ETFs Eric Pollackov. “It’s the one thing we can contol.”
Cut-throat competition is supposed to be good for consumers, but the battle between Apple and Google over maps apps shows that’s not always the case.
On the iPhone 5, which went on sale Friday, the popular Google Maps app was replaced with Apple’s own maps software. The change was widely panned by consumers, who complain that Apple stuck them with inferior software in an effort to hurt one of its biggest competitors. Apple conceded Friday that the new map software is still a work in progress, and said it will get better with time.
A housing recovery may be underway, but there’s an obstacle that appears to be slowing down the rebound: the unusually high number of buyers who walk away from their contracts.
An average of nearly 18% of signed contracts on existing home sales were canceled during the three months ending July, according to data released this month by Capital Economics, an independent research firm. That’s the highest all year and the most since May 2010, when that figure reached 23%; in the five years before the housing slump started, the average never went higher than 10%. Separately, 36% of realtors are reporting some kind of problem with a contract, including cancelations, delays and renegotiations of the sales terms, according to August data by the National Association of Realtors. That’s up from 30% earlier this year.
Big online banks are bucking a trend and raising the rates they pay to savers. The question for consumers is whether it’s worth chasing higher yields from bank to bank.
Last month, Sallie Mae Bank, a subsidiary of Sallie Mae Inc., increased the annual yield on its money market account to 1% — the second increase since July, when the yield was 0.85%. Ally Bank raised its savings and money market account yields twice over the same period, from 0.84% to 0.95%. In August, American Express Bank’s savings account yield rose to 0.90%; in May, it was 0.75%.
Investors who are contemplating the iPhone sales surge that will kick off this month as the new model goes on sale might feel compelled to buy Apple (AAPL) stock.
They could do worse; it sells for 16 times projected earnings for Apple’s fiscal year ending this month, versus 14 times for the broad market. But with some slight math contortions — using next year’s higher, projected earnings and subtracting the company’s cash and investments from its stock price — the valuation drops to 11 times earnings.
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