Markets in a Nutshell
April 19, 2010 Issue
The stock market was mostly up last week as the Dow gained 0.2% and the Nasdaq 1.1%. The S&P 500 slid 0.2%. For the year the Dow is up 5.7%, the Nasdaq 9.3% and the S&P 500 6.9%. Gold dropped last week but is up 3.7% for the year. Oil prices fell to $83 a barrel (good for lower gas prices).
Here is more incentive for companies to pay the federal govt. back (us as taxpayers back) the money "lent" to them during the worst of the '08-09 financial crisis. An article in the 4/17-18 Wall Street Journal reports that govt. "pay czar" (who thought we would ever have the fed govt. dictating salaries at companies) Ken Feinberg released pay schedules for the executives of a number of companies who have taken and continue to take govt. money. Who are they? Read on..
AIG, GM, GMAC are among those companies. Now while I think it is hard to make a case that the govt. should not be involved in decisions on those companies (after all it is your and my money the companies took), it is scary to think in terms of the govt. deciding salaries and pay for private corporations. Would you want them deciding yours?
The stock market has continued to shake off "bad" news and focus on "good" news (although we are overdue for a "normal" type correction. For the first time since Sept 26, 2008, the Dow Jones average closed above 11,000 (closing at 11,018 Friday) last week. Better economic news includes increased manufacturing production (up 0.9% in March and 6.4% above its June 2009 low), March retail sales (you and I buying stuff) up 1.6%, and low inflation (1.1% core inflation the last 12 months). Read on..
Of course, still hanging out there is trying to restore the 8.5 million jobs lost the past two years, the very high debt levels in all areas of the economy (private sector and govt. debt is 370% of GDP), and a still shaky housing market (the number of homeowners over 2 months late in payments rose to 6 million in March). So the bottom line is the economy has been and continues to slowly improve but we have some bigger (macro) problems to deal with which will be a drag on building a strong base for a sustained economic boom.