By Sean Corey
Staff Writer
New Federal Reserve Chair Janet Yellen hinted that the Fed may end its bond buying program, quantitative easing, on Wednesday. Currently the Fed buys around $60 billion dollars worth of bonds each month from various banks. This lowers interest rates and increases lending to businesses and other borrowers, thus providing a stimulus to the economy. Ending this bond buying program is a sign that the Fed is confident the labor market is getting stronger. This news sent interest rates on the 10-year Treasury note up 3.4 percent, while sending major stock indexes down nearly one percent.
World stock markets have been volatile, meaning lots of price movement, this past week due to the tensions in Crimea, annexed by Russia on Tuesday. Before that, Crimea was Ukrainian territory. A large-scale conflict between Russia and Europe could send energy prices through the roof and hurt any company that does business in the region. Tensions eased on Tuesday though when Russian President Vladimir Putin said he doesn’t want to see a further division of Ukraine, according to a strategist from Barclays.
This Week in SIMM
Long Fund: $262,690
Energy Fund: $271,610
GAINERS
Cheniere Energy (LNG) 8.72%
Teva Pharm. (TEVA) 2.63%
HCA Holdings (HCA) 1.92%
Metlife (MET) 1.62%
LOSERS
GNC Holdings (GNC) -7.07%
National-Oilwell (NOV) -3.54%
McDonalds (MCD) -2.01%
Boeing (BA) -1.55%
Trading Activity
DON’T BUY
Hold
Qualcomm Inc. (QCOM),
Qualcomm manufactures and designs digital communication products mainly for cell phones and other mobile devices. They are the leading developer in code division multiple access (CDMA) technologies, which facilitate communication between cell towers and mobile devices. The SIMM long fund has owned 36 shares for close to two and a half years, appreciating 38 percent since the original purchase. Although Qualcomm is facing more competition from Apple and Mediatech, their extensive patent portfolio and licensing agreements guarantee a steady stream of cash flow for years to come. Our valuation of $79.27 shows there is still room for more gains.
Sean Corey is a member of Students in Money Management. His email is coreysm10@bonaventure.edu.
