As we predicted, the stock market is starting to correct the sell-off that it experienced last week. GM posted a profit over $800 million, showing that their re-structuring plan is working. Also, Consumer Confidence is at a 6 year high. Thanks to a drop in the price at the pump of gas ($.17 drop in the last two weeks for the national average), consumers are starting to spend more on school supplies, and even early holiday buying. Furthermore, the stability of the overseas markets have given investors more confidence to buy, showing that last weeks sell-off was more of a bump in the road than a crisis.
Thanks to another lackluster housing report, the Dow plummeted more than 400 points today. Although some of that has been gained back in mid-afternoon trading, it seems that the Dow will once again have another major loss. Just days ago, it recorded a loss of about 200 points. With the Dow so close to breaking another record, investors are worried that the economy might be headed into a recession. However, this has happened a few times in the last few months, and the US markets have continued to make up the difference and even gain back more than it lost. Look for tomorrow to be another big day for all of the US markets.
The Dow has yet to close above 14,000 points. There was speculation that today might be the day, but with the Dow opening and seeing a huge loss over 100 points, the goal of 14k is now a little more distant. The Dow has reached records though, being pushed above 14,000 points several times in the last week. However, closing above that magic mark will in itself be a record. There is speculation that one of the many factors behind this rollercoaster effect is Milk. Just today, Starbucks Coffee announced that it would once again be raising prices on a cup of joe, after rising costs in Milk have made them realize they might not meet their profit forecast. However, it is not only Starbucks that is seeing this rise. Consumers are also paying more for goods such as Milk and Cheese at the grocery store. The rising cost of oil is also playing into this. An article this morning announced that $100/barrel oil is just months away, but we remind people that this statement has been made for the last three years. As the summer driving season starts to wind down, look for the price at the pump to come down a bit.
As the end of the trading day draws near, it appears that the Dow will set another record by closing above 14,000 points for the first time ever. We would like to remind people that this is almost twice the value that the Dow was just a few years ago, after the Clinton Administration led Dot Com failure. During that crash, the Dow was in the 7000 point range. Thanks to the Bush Administration, tax cuts, wages, and consumer confidence have all grown. As this was first reported this morning, we would like to give credit to The Today Show and CNBC for reminding the public of just how good the economy really is and how much it has grown.
The Dow crossed 14,000 points today for the first time, and is seeing larger than expected gains in the morning. The Dow is already up over 48 points, hovering at the 14k mark. Merrill Lynch, the nations largest brokerage, is said to have helped push the Dow up by giving its 2nd quarter profits, which were up over 30%. Stay tuned as we cover this history in the making story.
Thanks to a Blue Chips deal involving Verizon, the Dow was pushed to a new record today…It closed at 13.950.58, after reaching a high only 11 points shy of the 14k mark. Look for us to be one of the first to publish news if the Dow does break the 14k mark!
After a short break to update several sites, we are back up and running. There has been mixed news lately in the investment world, with the most recent coming today with a huge sell-off thanks to more mortgage fears in the already slumping housing market. On the other hand, the Bush Administration is set to announce today that the Federal Budget Deficit is about 40$ billion lower than previously expected for the year. Thanks to higher than expected tax returns, and an economy that is fairly stable (minus the housing market), the federal government has been able to lower the deficit from its peak in 2004. Although the War in Iraq is continuing to be a big draw, averaging about $12 Billion/month, seeing that the deficit is going down is a sign that tax cuts are working and that the economy is not receding as some have predicted.
The US economy is still growing, but at a much slower level than previously thought. The economy moved at just .7% for the first quarter of the year, which is one of the slowest paces it has seen in the last 4 years. This brings mixed feelings to those that are heavily invested in the current economy. On one side, this is good news in that the Federal Reserve may once again hold off from raising interest rates. However, for those that have investments that want to see an interest rate rise, this presents a little bit of sad news. The economy is still growing, but is mainly being held back by the slower than usual housing market. Look for an announcement about interest rates to come soon, and the busy summer driving season crosses its midway point after the 4th of July holiday.
Big Oil has announced that because of the new interest in biofuels, refinery expansion is not going to happen as planned. The oil industry is now seeing a renewed interest in biofuels, such as E85 Ethanol and bio-diesel. With this interest, especially being pushed by the Bush Administration, oil companies are deciding not to expand at the rate that is currently needed, citing facts that oil companies may lose profits in the future, regardless of how much profit they make currently. Stay tuned as we monitor this situation.
During the last year (May 06 to May 07), the number of housing closures has jumped 90%. May 2007 was up 19% over April 2007, which shows that the poor housing market has taken a toll this spring. A large part of this increase is due to the faltering of the subprime markets, which cater to those with poor credit ratings. Because people are able to find jobs due to a strong economy, they are buying bigger and nicer houses. The problem with this is the home owners do not change their lifestyles in order to accommodate larger house payments, resulting in more foreclosures. Nevada, Colorado, and California are three of the top reporters of this income, showing that cities in those particular states could be out pricing themselves. The top three metropolitan cities reporting data were all located within the state of California.