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 8290 and, on Monday, jumped 44 points.
- On Tuesday, the Dow Jones Industrial Average fell 161 points.
- On Wednesday, the Dow Jones Industrial Average rose 15 points.
- On Thursday, the Dow Jones Industrial Average went up 5 points.
- On Friday, the Dow Jones Industrial Average fell 47 points and closed the week at 8146.
- The federal minimum wage will rise to $7.25/hour on July 24, 2009. It remains to be seen whether this has any adverse impact on employment.
- Late payments on home equity loans have reached a record high. In the first quarter of 2009, 3.52% of all home equity loans were delinquent. Experts anticipate that this figure will continue to rise until the jobs market improves.
- Similarly, delinquent credit card debt surged to another record high. Delinquent credit card debt has now reached 6.6% of outstanding credit card debt.
- Banks are cutting back on credit cards and credit card lending. In the first four months of 2009, banks issued 38% fewer credit cards than in the same period a year earlier. Banks are also setting lower credit limits on those cards they do issue.
- California’s credit rating was downgraded by Fitch to BBB which is just one level above junk.
- As of Tuesday, California had issued IOUs totaling $109,000,000.
- Other states with particularly serious budget problems include Pennsylvania, Ohio, North Carolina, Illinois, Connecticut and Alabama.
- Lear Corp., a major auto parts supplier for both Ford and General Motors, filed for bankruptcy.
- Morgan Stanley’s head credit strategist expressed serious concerns about the rally in junk bonds issued by companies with heavy debt structures. He called the market “incredibly dangerous.”
- Google announced that it is developing a PC operating system to compete with Microsoft.
- The number of homeless people in suburban and rural areas has jumped sharply in the past two years as the economy has deteriorated.
- Unemployment and fears of job loss are hammering retailers. Same store sales for most retailers show a negative trend despite deep discounts on goods.
- Apartment vacancies in the U.S. have reached a historic high. The national apartment vacancy rate currently stands at 7.5%.
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.