There have been various developments over the past several weeks which investors may consider relevant in allocating their resources or evaluating alternatives that are available to them. Some of the more significant developments include, but are not limited to, the following:
- The Dow Jones Industrial Average opened the week at 8018 and, on Monday, dropped 42 points.
- On Tuesday, the Dow Jones Industrial Average dropped 186 points.
- On Wednesday, the Dow Jones Industrial Average jumped 153 points.
- On Thursday, the Dow Jones Industrial Average soared 246 points and closed the week at 8083.
- On Friday, the markets were closed for the Easter holiday..
- Employee benefits continue to be squeezed as companies cut back. Among other things, employers are cutting salaries, reducing medical and retirement benefits, furloughing workers and reducing hours.
- IBM terminated negotiations related to its proposed acquisition of Sun Microsystems.
- Diageo Plc, the world’s largest liquor maker, reported that demand for its products is softening.
- Automobile sales in March were 37% lower than in March, 2008 but were up 25% from February’s dismal levels.
- Ford Motor Company announced that it has made arrangements to reduce its outstanding debt by $9.9 billion.
- Blockbuster, the movie rental company, has expressed substantial doubts about its ability to stay in business.
- Japan has announced plans to spend almost $100 billion on a new economic stimulus plan.
- Record numbers of consumers are delinquent on consumer loans according to recent reports. More borrowers are paying late, if at all, according to the American Bankers Association. In the fourth quarter of 2008, 4.2% of consumer loans were delinquent and another 4% has already been written off.
- Even the Masters golf tournament is being hit hard by the economic downturn. Corporate entertainment spending is reportedly down 25% to 50%, tickets are more available and cheaper, and corporations that have received government funds are reportedly eliminating or minimizing their attendance at this year’s event.
- U.S. consumer credit dropped by $7.48 billion in February reflecting a significant drop in consumer spending.
- Moody’s Investors Service assigned a “negative outlook” to the credit ratings of local governments (counties, cities and towns) in the United States. Moody’s believes that “many if not most local governments” will be adversely impacted over the next 18 months by poor economic conditions.
- The average cost of gas has increased $.10 over the past three weeks.
- Wells Fargo surprised the market by announcing that it earned $3 billion in the first quarter, its largest profit ever.
- Many market experts are expecting dismal first quarter financial results from the major airlines. Passenger traffic has been off sharply.
- As tax revenues have fallen dramatically, many states are considering raising taxes to replace lost revenues. New York and California have already implemented large tax increases. Other states considering increases include Arizona, Connecticut, Minnesota, New Jersey, Massachusetts, Illinois, and Delaware.
- Local economies that rely heavily on convention business are hurting as more and more conventions are cancelled or downsized. Las Vegas, Orlando, Chicago, Atlanta and New York are the nation’s top convention cities and all are feeling the pinch.
- An Associated Press report noted that many diabetics are risking their lives by eliminating or cutting back on their insulin treatments and medicines as the poor economy results in job losses and lost health insurance. Unfortunately, many Americans with other serious ailments are probably doing the same.
Page Perry’s Market Monitor is published periodically to give investors an overview of certain recent developments impacting the economy and/or the investment markets.