Chrysler & GM
Stocks, bonds, the Dollar, oil and gasoline all moved sideways today.
Gold moved sideways too, but was up a very little. My reading of the technical charts says that gold appears to be breaking out of its price channel to the upside. While this is speculative at best, we can watch the next price movements, and if they are upward, this will be another buy signal.
In the news today…..
Jobless Claims – rose last week to 637,000 from the previous week’s 601,000. This see-saw of these numbers is the reason I advise you to not take any single week’s number too seriously. Last week’s number caused a big rally in shares. Now what?? Well, shares went down yesterday, and the future economic news isn’t great – so the pundits on Wall St will read anything into the news that causes trading to occur. Conclusion – unemployment will continue going up.
Producer Price Index (PPI) – rose 0.3% last month. This is much greater than expected as a decline was expected to continue to show the deflationary trend started last year. It looks like that deflation is now over, and inflation will start to take hold. Inflation starts at the PPI level, and then creeps into the CPI prices that you and I pay.
Chrysler and GM – will close a bunch of dealerships. Chrysler announced it was closing 789 dealerships, and GM is thought to be considering up to 2000 dealership closures. Okay, so what, you say??? Well, let’s translate those closures into jobs lost. These closures will easily translate into over 100,000 jobs lost. They will trickle out over the next couple of months, but the trend is bad. Also, with less dealerships, there will be less competitions for your new car dollars. That isn’t bad considering how much you were being gouged to pay for the union benefits agreed by the stupid Detroit carmakers. Their lack of competitiveness together with some really poor foresight, is what caused the demise of Detroit as we fondly remember it from the muscle car times back in the 50’s and 60’s.
Here are the last numbers for today:
Dow Jones 30 Industrial – 8331 (up 46 points)
10 Year Treasury Bond – 3.11% (no change)
Euro – $1.3629
Gold – $928 (up $3)
Oil – $58.63 (up $0.01)
Gasoline $1.72 (up $0.03)
