Monday, June 8, 2009

Quick Notes & Articles for the Day - June 8

Dollar Rallies - The U.S. dollar has been rallying since Friday against its foreign currency rivals. The British pound is being hit due to political pressure against British Prime Minister Gordon Brown and his ability to be reelected later this year. The Monday low for the pound was $1.5802 versus $1.5981 on Friday.

The euro is falling due to S&P lowering the credit rating to Ireland from AA+ to AA. The Monday low for the euro was $1.3803 versus $1.3968 on Friday.

Gold Falls as Dollar Rallies - Gold futures declined this morning for a second straight session. Gold fell below $950 an ounce for the first time in more than two weeks as the U.S. dollar continued to strengthen against other foreign currencies curbing gold's investment appeal. Gold fell $17.20 (-1.8%) to $944.50 an ounce. This is the first time gold has been below $950 since May 21.

SunTrust Closes Stock Offering - SunTrust Banks on Monday said it had completed a previously announced common stock offering and other moves that bring the company's capital ratios in-line with the stress tests conducted by the government. SunTrust sold 124.3 million shares of common stock and raised $1.56 billion in new capital. "The positive reaction to our stock offering underscores what we believe to be the market's confidence in SunTrust, our strategies and, especially, our post-recession growth prospects," said SunTrust CEO James Wells in a press release.

Articles

Final Capital Raising Plans for Nine Large Banks Due Monday - By Ronald D. Orol - MarketWatch - "A group of nine large financial institutions must provide capital-raising and governance plans Monday, the same day that another group of mega-financial institutions is likely to be given the go-ahead to repay billions of dollars in government money."

Obama's Health Cost Illusion - The Wall Street Journal - "The main White House argument for health-care reform goes something like this: If we spend now on a hugely expensive new insurance program for the middle class, we can save later by reducing overall U.S. health spending. This 'tastes great, less filling' theory could stand some scrutiny, not least because it is being used to rush through the greatest social spending program in American history."

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