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Bloombug Capital Weekly
May 26, 2009
BLOOMBUG CAPITAL WEEKLY FORECAST 8
Research team: Jinah Jang, Bae Deuk Han, Young Sun Key, Ji Young Sung, Lei Yanghua, Dennis Chung
Market Review:
Stocks have been in somewhat of a holding pattern recently, ending last week essentially flat, after the major
indexes rallied some 30% from the lows of early March. The trend of economic optimism that triggered the
market higher over the last few months has faded and investors are now looking for more concrete signs of
recovery. If no such positive signs emerge, our team, bloombug Capital think the market could be in for a
significant pullback. But if the outlook brightens, then a big selloff may be avoided.
Prediction:
We expect the Dow to increase by 51.51 points to 8525.
Weekly
1st April
7th April
14th April
12th May
19th May
26th May
2th June
Forecast
7,600.16
7,342.02
7,800.00
8,526.74
8,600.00
8629.08
8525
Actual
7,522.02
7,975.85
7,920.18
8,418.77
8,504.08
8473.49
99%
92%
98%
99%
99%
98%
Accuracy
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Bloombug Capital Weekly
May 26, 2009
Upcoming Events/ Important announcements for the week:
Major business events and economic events scheduled for the coming week May 18-22
(some dates are tentative):
Monday
-Memorial Day. Markets closed.
Tuesday
- NEW YORK -- Standard & Poor's/Case-Shiller releases its March and first-quarter index
of home prices, 9 a.m.; the Conference Board releases the Consumer Confidence Index for
May, 10 a.m.
ANN ARBOR, Mich. -- Borders Group Inc. reports first-quarter financial results.
DETROIT -- Ed Montgomery, President Barack Obama's director of recovery for auto
communities and workers, to meet with officials and hold a workshop on applying for
federal aid.
Wednesday
WASHINGTON -- National Association of Realtors releases existing home sales for April,
10 a.m.; Federal Housing Finance Agency releases March and first-quarter home price
index, 10 a.m.
MEMPHIS, Tenn. -- AutoZone Inc. reports third-quarter financial results.
FRAMINGHAM, Mass. -- Staples Inc. reports first-quarter financial results.
Thursday
WASHINGTON -- Labor Department releases weekly jobless claims, 8:30 a.m.; Commerce
Department releases durable goods for April, 8:30 a.m.; Commerce Department releases
new home sales for April, 10 a.m.; Freddie Mac, the mortgage finance company, releases
weekly mortgage rates.
ISSAQUAH, Wash. -- Costco Wholesale Corp. reports third-quarter financial results.
PITTSBURGH -- H.J. Heinz Co. reports fourth-quarter financial results.
RICHMOND, Va. -- Scheduled hearing on the bankruptcy of Circuit City
Friday
WASHINGTON -- Commerce Department releases first-quarter gross domestic product,
8:30 a.m.
NEW YORK -- Tiffany & Co. reports first-quarter financial results.
Analysis:
Indicators (-):
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Worries about the U.S. fiscal outlook from S&P - The U.S. dollar, on track for its biggest weekly
fall in two months, took the brunt of growing worries about the U.S. fiscal outlook after Standard &
Poor’s on Thursday said it might cut Britain’s AAA credit rating because of soaring public debt.
Potential bankruptcy of GM – Investors cited the potential bankruptcy of General Motors as a
concern for the markets, as further job losses could imperil the U.S. economy. GM is facing a June 1
deadline to work out its issues with creditors if it wants to avoid a bankruptcy filing.
Two Illinois banks fail, 36 for the year – Strategic Capital Bank taken over by Midland States Bank,
expected to cost FDIC $173 million; Citizens National Bank taken over by Morton Community Bank,
expected to cost FDIC $106 million.
Indicators (+):
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Bloombug Capital Weekly


May 26, 2009
Obama signs credit card crackdown – New law will curtail fees and rate hikes starting in February.
Industry opposition fell under populist push, culminating year’s long drive by consumers.
Economic recovery in sight as contraction slows, says OECD – World economic output appears to
be slowing and a recovery could begin at the end of this year, OECD chief Angel Gurria said on May
23.
Our Forecast:
Fell over the past few trading days of the U.S., wants to maintain the momentum up, consumer confidence,
housing sales and GDP and other economic indicators released this week, should be enough to inspire investor
confidence.
At present, investors are worried about the news, including the United States auto maker General Motors GM
(US): General Motors) may be bankrupt, or the unemployment rate continues to rise. Rumors that the United
States market AAA bond rating may have been lowered due to the high budget deficit, despite the US GOV
officials try to maintain investor confidence of come forward to call, still resulted in U.S. stock index fell in Thu,
Fri two days.
In order to avoid the fate of bankruptcy, GM must reach debt-for-stock agreement with creditors before June 1,
but creditors are not happy with the GM bids. Some analysts said, GM bankruptcy will lead to increase in U.S.
unemployment, and cause severe impact on economic.
This week the U.S. Treasury Department will auction 101 billion U.S. dollars of Treasury bills, a record high.In
2009, the United States government bonds is expected to scale up to 2 trillion. Gradually lead to excessive debt
worries, will affect the U.S. stock market.
As we considered the past, stocks surged more than 3 percent on May 4 following unexpected increase in
pending home sales and construction spending, this coming housing price index report on Wednesday will be
also important.
Once again, an increase by 8525