Page Perry's Market Monitor - July 31, 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 9093 and, on Monday, rose 15 points.
• On Tuesday, the Dow Jones Industrial Average fell 12 points.
• On Wednesday, the Dow Jones Industrial Average dropped 26 points.
• On Thursday, the Dow Jones Industrial Average soared 84 points.
• On Friday, the Dow Jones Industrial Average rose 17 points and closed the week at 9172.
• Former Federal Reserve Chairman Alan Greenspan said that the recession is nearing the end. On the other hand, noted economist Nouriel Roubini fears that the U.S. economy still faces the possibility of a double-dip recession.
• Recently released economic indicators suggest that the U.S. economy is slowly improving. The major stumbling block remains very high unemployment.
• The unemployment problem could stifle the recovery of business. High unemployment rates severely reduce consumer spending which is the engine that drives business recoveries.
• The New York Times reports that as many as 1.5 million people will exhaust unemployment benefits in the near future. Unless the government acts to extend benefits, many individuals could be left penniless.
• During the last twelve months, worker compensation in the U.S. increased by the lowest amount on record.
• In May the Case/Shiller home price index of 20 major cities showed its first increase in almost three years.
• Sales of new homes were 11% higher in June than they had been in May.
• The current earnings season has been positive for most companies. Approximately 74% of the companies that have reported exceeded earnings forecast.
• The rate of job losses slowed in July. Payrolls dropped by approximately 325,000 jobs in July compared to 467,000 in June.
• The number of unemployed workers filing first time claims for unemployment benefits was up by 25,000, slightly more than forecast.
• Unemployment in the sixteen countries in the European Union has reached 9.4%, a ten year high.
• Verizon announced that it was eliminating 8,000 jobs mostly in its wireline division.
• The nine Wall Street banks that accepted taxpayer money to bail themselves out paid $33 billion in 2008 bonuses despite losing tens of billions of dollars. It appears that incompetence does pay.
• Unpaid property taxes are soaring in communities across the country. This is putting additional financial pressure on local governments that are already struggling to make ends meet.
• The recession has forced business travelers to cut back on expenditures affecting airlines, hotels and restaurants among many others.
• Regulators shut down five more banks this week bringing the total number of banks closed in 2009 to 69.
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.
