Shrinking Service
Well, the election results are in and Senator Obama will be our next President. Stock celebrated by taking profits from yesterday, and ended down 486 points. Bonds continued their increase in value (lowering of interest rates).The Dollar stayed still, and Gold fell $15 – it’s still a spectacular buy.
Oil and gasoline both fell in price as the fight is on whether prices should go lower, or prices should go higher. This fight seems to be a draw so far, as the big money (speculators) are still trying to figure out what the “trend” is going to be. Speculators love trends as “the trend is your friend” is their motto.
In the news today….
The Service Sector of the economy shrank last month. The ISM Index (shown below) is a measure of economic growth or economic contraction in the Service Sector – the breakeven point is 50. The Service Sector consists of those businesses that don’t build anything, but help other companies or serve individuals. 82% of the service sector people contacted said they have reduced their spending because of the economic recession.Take a look at this chart and you can clearly see that the recessionary forces have been at work in the Service Sector for about 3 years. The Service Sector is only about 10% of the GDP calculation equation – so it doesn’t mean as much as the industrial sector or even more importantly, the consumer spending.
Some actually counts the number of jobs that are announced to be cut in any month. For October, the number was 113,000 jobs announced. The actual number of jobs lost is greater than this number as some people don’t do any announcing – just cutting.
Here are Yesterday’s numbers:
Dow Jones 30 Industrial – 9139 (down 486 points)
10 Year Treasury Bond – 3.69% (down 0.07%)
Euro – $1.2948
Gold – $742 (down $15)
Oil – $65.30 (down $5.23)
Gasoline – $1.42 (down $0.11)
