Page Perry’s Market Monitor – May 22, 2009

 

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 8269 and, on Monday, soared 235 points.
  • On Tuesday, the Dow Jones Industrial Average lost 29 points.
  • On Wednesday, the Dow Jones Industrial Average fell 53 points.
  • On Thursday, the Dow Jones Industrial Average dropped another 130 points.
  • On Friday, the Dow Jones Industrial Average slipped 15 points and closed the week at 8277.
  • The number of people claiming unemployment benefits has risen to approximately 6.7 million.
  • The unemployment news for the week was mixed. Eighteen states reported increases in unemployment rates while twenty-one states reported minor decreases in unemployment rates. Between December, 2007 and April, 2009 the economy has lost 5.7 million jobs.
  • American Express announced plans to eliminate approximately 4,000 jobs as part of a restructuring.
  • The United States Postal Service has eliminated 25,000 jobs this year in an effort to reduce costs.
  • Hewlett-Packard Co. reported a 17% drop in its recent quarterly profits and announced that the company would eliminate 6,400 jobs.
  • California voters reject a variety of proposals aimed at addressing the state’s financial problems. The state will now likely be forced to adopt a series of cost-cutting measures to deal with the problem.
  • USA Today reported that the recession is having a significant impact on local law enforcement. Many law enforcement agencies are experiencing deep budget cuts and are experiencing difficulty in maintaining even basic services.
  • Forecaster J.D. Power & Associates predicts that automakers will sell only about 10 million cars in the U.S. this year.
  • The recession is taking a big toll on malls across the country. During the twelve months ended March 31,2009, tenants in U.S. malls experienced a 6.5% drop in same-store sales and hundreds of anchor tenants pulled out of malls. Experts fear that there will be a severe shakeout in viable malls that will adversely affect employment and tax revenues in many communities.
  • Federal regulators have closed 36 banks since the beginning of the year. The most recent casualties were BankUnited, a large Florida savings bank, and two banks in Illinois.
  • On Friday, President Obama signed new credit-card consumer protection legislation into law. Some critics fear that the new law could cause banks to cut available credit by as much as $90 billion and frustrate economic recovery.
  • Retail gas prices have begun to surge over the past several weeks just in time for the summer travel season.
  • A recent survey indicated that as many as 50% of American families are either cutting back on or eliminating travel plans for the summer season. This is bad news for the travel industry which is already experiencing trying times.
  • More and more college students are staying closer to home to attend college. This is putting a strain on many universities which rely heavily on higher out-of-state tuitions to finance operations.
  • New home construction in the U.S. has hit a record low.
  • Reports are that the Obama Administration is considering the establishment of a federal consumer protection agency that, among other things, would relieve the SEC of many of its responsibilities.
  • The Obama Administration also ordered a rollback of many regulations which restricted individual rights to file product liability suits in state courts.

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.