Daily Investment Interpretations
January 14, 2009
The markets headed south today, falling 3%-to-3.5%. The NASDAQ
to end the day below 1,500, at 1,490. The Dow parted
to close at 8,200. The S&P 500 gave up 29.17
to 843. Oil backed up to $37.44
a barrel, and gold backed down to $808.80 an ounce. The VIX
popped almost 6 points to 49.14.
The news that accompanied this decline included the realization that banks and other financial organizations are still in trouble and will require additional infusions of capital.
Energy stocks also declined.
Motorola announced that it is cutting an additional 4,000 jobs, and Seagate is laying off 3,000. Nortel filed for bankruptcy, along with Goody's and Gottschalks. The Beige Book was released and it's anything but upbeat: Economic Report: CORRECT: No improvement in economy, Fed's Beige Book says. It confirms that the U. S. economy is "in a world of hurt". December retail sales were dismal: Retail Stocks: Anemic December sales batter retail stocks, and were the sixth consecutive month of retail sales declines. Republican senators are moving to block the bailout bill.
Also worth mentioning might be an article published in Barron's: Expert panel girds for worst. To quote from the article:
"The stock market is experiencing a snap-back rally, similar to what we saw in 1930, after the Crash of 1929. They had a name for it, the "little bull market." It came about after the Federal Reserve slashed interest rates to 3.5% from 6%, and later to 1.5%. President Hoover had ordered federal departments to speed up construction projects, and the state governments to expand public works projects. He went to Congress asking for a huge tax cut and a doubling of spending on public buildings, dams, highways and harbors. That sounds familiar. Hoover predicted the crisis would end in 60 days. He received widespread praise for his intervention."
Todd Harrison observed that the market, by churning along laterally, has worked off the overbought condition that attended last November's selling climax, and are now poised to go lower.
For what little it might be worth this far in advance of tomorrow's opening, stock market futures tonight are slightly negative.