More Tough Economic Data Hits Market
November 10th, 2008 by 
CA Editors
Sulaman Chaudhry and Andy Cole send: Quickly recapping last week:
• The ISM Manufacturing index hit a 26-year low last week, dropping 4.6 points to 38.9, the lowest since September of 1982.
• Auto sales are now at 25-year lows. October sales for General Motors (GM) fell 45%, while Ford’s (F) sales fell 30%. Toyota’s (TM) sales dropped 23%.
• Bankruptcies rose 13% from the month of September and 47% year over year. California bankruptcies rose 76% year over year.
• Circuit City (CC) is closing 155 stores in order to restore profitability to the company.
• September factory orders fell 2.5%, worse than expected.
• UBS, The Royal Bank of Scotland (RBS), and JP Morgan (JPM) all warned of more troubles that would result from the current financial crisis.
• Cisco (CSCO) warned of a sharp contraction in business going into Q2.
• ArcelorMittal (MT) missed estimated and stated that they plan on cutting global output by 30%. Shares fell 21.5%.
• Jobless claims jumped 122,000 to 3.8 million, a level not seen since 1983.
• Same store sales fell .5% vs. the previous year. Wal-Mart (WMT) beat expectations as consumers continued to look for bargains in food and other staples. Apparel chains suffered sharp declines.
• Toyota cut its outlook for 2009 in half.
• Qualcomm (QCOM) beats estimates but guided lower for the year as they see a possible drop in demand.
• Employers cut 240,000 jobs in October, bringing the jobless rate to 6.5% from 6.1%.
• Ford and GM both posted massive losses last quarter. GM burned through $6.9 billion in Q3 while Ford cruised through $7.7 billion. Both firms are planning job cuts. The bombshell, though, came from GM when they stated the need for government help to allow them to continue business into 2009.
• Berkshire Hathaway (BRK) stated that Q3 EPS fell 19%.
• Pending home sales fell 4.6% in September.
Again, not really much can be said. The economy is in tough shape.
It’s a trader’s market out there for those that have the time to watch the market. If you don’t have the time, you can never go wrong with cash.
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November 11th, 2008 at 2:05 am
I’ve been reading a lot on how European banks may be the next to blow up. Watch Eastern Europe. Europe has about $3.5 trillion of debt outstanding to emerging market countries whereas the US has only about $500 billion on the line–a good deal of the European lending has been to Eastern Europe. Much of our problems in the market, in addition to the weak economy, seems to be due to major hedge fund deleveraging. I suspect this will continue to pressure the markets until the end of the year, and then we’ll be able to trade based on the actual economy.
November 11th, 2008 at 10:49 pm
Rob,
I’ve been real concerned about Europe since I read a timely think-tank piece about 6-8 weeks back… most of what was highlighted there has materialized, specifically that the problems would be worse than in America because of higher bank debt to GDP ratios.
November 14th, 2008 at 4:01 am
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