Saturday, December 31, 2005

FOI: Whats in store for 2006?

1. Recession in the U.S ?
The inversion of the yield curve (short-term yields turn more than long-term yeilds) noticed in the last week of December ( the 2-year U.S Treasury bills surpassed the 5-year and 10-year Treasury bills ) has provoked economists and analysts to sit on the edge of their seats to analyze whether the yield curve inversion will result in an expected slowdown in the U.S market, or are the bond markets predictable anymore?

2. The Enron drama
With Mr. Causey pleading guilty and agreeing to support the prosectors, the securities and fraud case against the Enron, the energy giant which filed for the biggest known bankruptcy case in 2001, is set to hit the Houston federal court early in 2006

3. Who is going to file for bankruptcy in 2006?
Ford Motors OR General Motors - One of these 2 will, definitely :)
With their problems building up with the United Auto Workers (UAW) going on strikes, shares drooping (GM's shares hit 20-year low), profits plummetting, these auto firms are under tremendous pressure to continue operations

4. M&A mania
With a 47% jump in the total value of the transactions in M&As to more than $2.5 trillion,
2006 seems to be another great record year for mergers and acquisitions. Goldman leads the deals.

5. S&P 500 stock portfolio - expected to return 10% in 2006

6. Japan is expected to come out of its long-term deflation - finally
Real estate prices are increasing. Japanese investors are buying Japanese stocks for the first time.

7. Energy in 2006
Tight international supply and continued expeced shortages can be attributed to the hurricanes. Crude oil prices are expected to average $55 a barrel through the end of 2006 or longer. The 3 largest U.S oil companies - Exxon Mobil, Chevron Corp and Conocco Philips made profits of $45 billion in the first nine months of 2005. This trend is expected to continue in 2006.



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