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 7994 and dropped 64 points on Monday.
- On Tuesday, the Dow Jones Industrial Average jumped 142 points.
- On Wednesday, the Dow Jones Industrial Average lost 122 points.
- On Thursday, the Dow Jones Industrial Average rose 106 points.
- On Friday, the Dow Jones Industrial Average surged 218 points and closed the week at 8281.
- Congress appears on the verge of passing a leaner economic stimulus package than that proposed by the Obama administration. The original plan called for an economic stimulus package of approximately $900 billion while the plan currently under discussion is closer to $790 billion.
- Unemployment in the U.S. has hit 7.6%. In January, the economy suffered the loss of 598,000 jobs.
- Perhaps more stunning is that the Department of Labor’s broader gauge of unemployment hit 13.9%. The broader gauge includes people who are working part-time because they couldn’t get full-time jobs and people who are not actively looking for work.
- The news on jobs continues to deteriorate in February.
- Macy’s announced that it was firing 7,000 employees.
- Morgan Stanley plans to cut approximately 1,900 more jobs.
- Chrysler offered buyouts to virtually all of its 27,000 hourly workers.
- General Motors has also offered buyouts to its hourly workers.
- PNC Financial reported that it plans to eliminate 5,800 jobs.
- Panasonic announced that it was slashing 15.000 jobs.
- Fidelity National Financial, the nation’s largest title insurance company, is cutting 1,500 jobs.
- Liz Claiborne is eliminating 725 jobs.
- On-line job advertisements have dropped by 1,000,000 ads in the past two months.
- One of the ripple effects of lost jobs is that it leaves many people without health and medical insurance.
- Many states are running out of money for unemployment benefits. Seven states are already borrowing from the federal government to fund shortfalls and another eleven states may have to do so in the near future.
- California has adopted a policy of semimonthly furloughs (unpaid days off) for state employees in an effort to cut costs. The effect of this policy is to cut approximately 9% of employee compensation and to close state offices on certain days.
- China’s unemployment is reportedly soaring as exports decline.
- Denny’s Restaurants gave away free “Grand Slam” breakfasts to approximately 2,000,000 people.
- The switch to digital television has been delayed until June.
- Southwest Airlines reported that its percentage of seats filled in January, 2009 dropped 1.4% from a year earlier.
- January automobile sales in the U.S. were 37% lower than in January, 2008.
- Residential real estate values in the U.S. dropped $3.3 trillion last year according to Zillow.com.
- UBS has reportedly been in discussions with several other brokerage firms about forming a joint venture.
- American retailers reported a dismal January as tight credit, lost jobs, and lack of consumer confidence keep shoppers at home.
- Spectrum Brands, the maker of Remington shavers and Rayovac batteries, filed for bankruptcy.
- Fortunoff Holdings, the jewelry and luxury goods company, filed for bankruptcy.
- According to the National League of Cities, approximately 84% of cities across the U.S. are facing financial problems. Furthermore, some 92% expect to have trouble making ends meet this year.
- The Securities and Exchange Commission received harsh criticism from witnesses and lawmakers on Capital Hill. According to the Associated Press, witness Harry Markopolos “told a House subcommittee hearing that ‘the SEC is captive to the industry it regulates and is afraid’ to bring big cases against prominent individuals. The agency ‘roars like a lion and bites like a flea,’ Markopolos said.”
- Similarly, Markopolos was very critical of the Financial Industry Regulatory Agency (formerly the National Association of Securities Dealers) reportedly saying that it was a “corrupt organization” that would do anything to protect its members.
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.