Another Down Day
Two BIG DOWN DAYs for stocks. Today the market was down 443 points. Stocks are pointing to the bad effect that the recession is having on the valuation of companies. The future is not too bright either.
Bonds moved sideways, but the Dollar strengthened as Hedge Funds are being caught off guard and must dump their holdings to payout to their investor demands. Gold also fell $10 today for the same Hedge Fund reason.
Oil is the big news as it is at a recent LOW PRICE, and is showing that prices will continue to fall at the pumps. I can’t wait. Lower gasoline prices is the only thing happening in the economy that might be considered good. All else isn’t good.
In the news today…..
The number of long term unemployed rose by 122,000 people last month to 3.84 million people. This is the highest this number has been since 1983 – and I believe it will get worse for a long time before it gets better. The unemployment rate should be increasing very soon to reflect this increase.
There is a steep drop in department store sales happening in October, and this will continue. The stores getting hit are JC Penny, Nordstrom – as well as Mervyn’s and Linen & Things, both of which are going out of business.
Fidelity is going to lay off 1400 people.
The Bank of England dropped its key interest rate by 1.5% to 3.0%, and the European Central Bank dropped its key interest rate by 0.5% to 3.25%. The Swiss dropped their key interest rate by 0.5% to 2.0%. You can see that all of Europe is seeing a recession coming straight at them, and are reacting accordingly.
Here are Yesterday’s numbers:
Dow Jones 30 Industrial – 8696 (down 443 points)
10 Year Treasury Bond – 3.71% (up 0.01%)
Euro – $1.2713
Gold – $732 (down $10)
Oil – $60.77 (down $4.53) – new RECENT LOW
Gasoline – $1.34 (down $0.09)
We did have a big move down today. The funny thing is that after 10% down and up days recently, a 4% move doesn’t feel as big any more.
The unemployment numbers can only get worse for the foreseeable future. That’s real scary.
I wonder if President-elect Obama knew what he was getting into. It is hard to imagine a major economic recovery before the next Presidential election.