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 8076 and, on Monday, plunged 51 points.
- On Tuesday, the Dow Jones Industrial Average bounced back 128 points.
- On Wednesday, the Dow Jones Industrial Average jumped 169 points.
- On Thursday, the Dow Jones Industrial Average lost 18 points.
- On Friday, the Dow Jones Industrial Average rose 44 points and closed the week at 8212.
- In the first quarter of 2009, the U.S. economy shrank at an annualized rate of 6.1%. This is the economy’s worst performance in over 50 years.
- A recent survey of economists by USA Today forecasted that the economy would continue to deteriorate for another six months and that the unemployment rate would reach 9.8%.
- Billionaire investor Warren Buffet told CNBC that the “economic Pearl Harbor ” has passed but that the “war isn’t over.”
- While, during the past week, there were several positive signs that the economy may be beginning to stabilize, unemployment and lost jobs remain a major concern. It is difficult to project any significant economic recovery until more Americans are put back to work.
- Textron, the manufacturer of Cessna planes and turf-maintenance equipment, announced that it was eliminating 2,100 more jobs.
- General Motors announced that it will gradually close its Pontiac division and that it plans to eliminate 21,000 factory jobs in the next year.
- General Motors plans to force 1,000 to 1,200 of its underperforming car dealers to close in an effort to stabilize its more productive dealers.
- Chrysler has filed for Chapter 11 bankruptcy. Chrysler’s bankruptcy is expected to involve immediately shutting down its plants for 30 to 60 days. It also expects to permanently shut down 5 of these plants by the end of 2010.
- Experts believe that Chrysler’s actions will have a significant ripple effect on auto parts companies with many failures likely. This, in turn, could adversely impact production at Ford, Toyota and other auto makers.
- The budget proposed by New York City Mayor Michael Bloomberg contemplates the elimination of 13,000 city jobs.
- The High Museum of Art in Atlanta laid off 15 full-time employees. These layoffs are indicative of what is happening at thousands of non-profit and charitable organizations across the country.
- The number of people collecting unemployment benefits is approximately 6.27 million.
- Agco, the second-largest maker of farm equipment, announced that first quarter profits fell 43%.
- MasterCard reported that first quarter profits were down 18%.
- Semiconductor sales were down 30% in March.
- According to a recent survey, consumer sentiment rose to the highest level since September, 2008 indicating that more Americans feel that the economy will improve.
- Manufacturing activity in the United States dropped at a lower-than-expected rate in April.
- Economists fear that a serious swine flu epidemic could extend current economic problems and delay recovery.
- The World Health Organization raised its swine flu pandemic threat alert to five meaning that there is significant human-to ?human spread in multiple locations. This is just short of reaching full pandemic levels.
- Hundreds of schools have closed in an effort to avoid the spread of swine flu. Many airlines have curtailed flights to Mexico because of the flu outbreak.
- The Securities and Exchange Commission reported that it has approximately 150 active hedge fund investigations, more than 12 active credit default swap investigations, and several dozen active municipal securities investigations going on. Let’s hope that this isn’t just more window-dressing.
- The Securities and Exchange Commission wants the authority to regulate hedge funds according to SEC Chairwoman Mary Shapiro.
- The New York Yankees, perhaps professional sports premier franchise, is slashing prices in an effort to attract more fans to attend baseball games.
- According to preliminary reports concerning the government’s stress tests of the nineteen largest banks, as many as fourteen may need to raise more capital. Those believed to be on the list include Citigroup, Bank of America, SunTrust, KeyCorp, PNC Financial, Wells Fargo and Regions.
- Bank of America shareholders elected a new chairman of the board, Walter E. Massey, to replace Ken Lewis. Lewis will remain chief executive officer.
- Government regulators seized three more banks yesterday. The government has now closed 32 banks this year.
- U.K. regulators blame bankers, excessive risk-taking and a culture of easy rewards together with lax supervision and oversight for “the astonishing mess of the financial system.”
- New York Attorney General Andrew Cuomo has issued subpoenas to more than 100 investment firms and their “middle men” as part of his ongoing investigation into abuses of public workers’ pension plans. Thank goodness for state regulators.
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.