The Market This Week

Market Snapshot:

Dow                        12,606.30           -246.79            -1.92%

Nasdaq                    2,439.94            -48.58              -1.95%

S&P 500                  1,401.02            -19.31                -1.36%

What a way to kick off the New Year with the past couple weeks on the market. Investors have proven to by quite shaky and showing a surprising lack on confidence. Why? Because that daunting questions looms on the horizon, is recession truly coming and will this be the year that it hits? No one knows for sure but continuing symptoms of our slowing economy have continued into this New Year as the dollar continues to weaken and oil rises higher and higher. Solution? One could hope but it seems that the only true out come would be a recession, all investors could hope for is a mild one.

Despite the gloom and doom investors on Monday received a small return of optimism as the Federal Reserve Meeting on January 29 -30 approaches, hoping for a fed rate cut to ease or relax worries of recession.  Despite such reassurance, the days result was mixed as worries grew over the upcoming fourth-quarter earnings. It was Tuesday when stocks took a tumble however when speculation arouse that Countrywide Financial Corp. could possibly file for bankruptcy protection and AT&T reported that the slowing economy is hurting their consumer business. That day the Dow Jones fell 240 points.

Friday took another hit as new fears arose in investors of the financial sector that will be reporting earnings in the coming weeks. The big scare is that the numbers reported will unveil continuing problems in the credit market. The Dow Jones took a hit of 250 points. Investor’s moods were further soured by a report by the New York Times that stated that Merrill Lynch might take a 15 billion dollar hit due to subprime exposure and Tiffany & Co.  released a profit warning as a result of the weakening consumer.

This week a very interesting article was released by Chris Isidore whose a senior writer from CNNMoney.com. In his essay he explains how two economists from Merrill Lynch and Goldman Sachs say that recession has already arrived. Their reasoning? A report released last Friday showed a sharp increase in the unemployment rate in December and with little economic growth. David Rosenberg, economist of Merrill Lynch, said “Friday’s employment report strongly suggests that an official recession has arrived”. 


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