January 15, 2009
January 15, 2009 by admin
The stock market continued moving lower on Thursday as economic news is bringing more questions than answers as it relates to the health of the U.S. economy. The stock market has lost ground for six straight days and is close to retesting the 7800 level it reached in November of 2008. There were a number of reports released today that have had an adverse affect on the market.
Initial jobless claims rose by over 50,000 for the week, a sign of continued deterioration with the labor markets. Home foreclosures spiked up to 3.16 million, a record high according to a report from RealtyTrac, one of the nations largest foreclosure experts. The numbers continue to grow at a staggering level and are up over 80% from 2007, indicating that now almost 2 out of every 100 homes in the United States is facing foreclosure.
Major banks are now beginning to report their Q-4 2008 earnings as well as provide guidance for 2009. The growing consensus is that 2009 will continue to be a struggle for major financial companies as the market continues to deteriorate. J.P. Morgan, one of the worlds largest banks reported earnings above expectations, but provided little hope for investors that there will be a major turn around anytime soon. Citigroup and Bank of America are due to release earnings over the next week, and both firms are strugling to maintain healthy capital ratios as their real estate and lending portfolios continue to decline. Both companies have seen their stocks value cut in half over the past two weeks as there is speculation that the companies will either need more money from the government through the Tarp program or be forced to begin selling off assets such as the Smith Barney venture to raise capital.
Mortgage rates have moved lower according to Freddie Mac for the 11th straight week. Fixed rate mortgage loans at historic low levels remain a bright spot with the economy and could be one of the catalysts in helping to put a bottom into the housing and stock markets at some point in the next six months.