2009 Forecast

Once again, the Dow Industrials has confirmed that there is support around the 8,000 level. Yesterday’s bounce marked the 12th time the Dow has bounced as it approached 8,000 since October. Only once has it failed to do so. That was November 20, when it set the low for this bear market at 7,464.

Economic Recovery?

No, the U.S. economy is not getting better. It’s getting worse. Daily Profit has been saying that unemployment will go higher and that we will see many more bankruptcies, especially in retail. But that doesn’t mean it’s any easier to take in the bad news.

The Fed’s About Face

It’s been my contention that oil prices will remain range-bound for the foreseeable future. And the 60 Minutes story I relayed on Monday supports that belief. If oil’s move to $147 was based on more speculation (and manipulation), than it was on true supply and demand issues, then it’s going to be a while before enough demand returns to push oil prices significantly higher.

The Oil Bubble

 

60 Minutes ran an excellent piece on the run in oil prices from 2005 – 2008. And guess what? It was all Enron’s fault!

 

Stock Valuations

On Wednesday, after a few down days in a row, we tried to sift through the various clues to decide whether the selling we saw was investors taking some profits, or whether we were seeing the start of a more serious sell-off based on lowered earnings guidance and the prospect of unemployment running higher than the current consensus of 9%. 

Your Daily Profit

Retail sales numbers are out for December. Obviously, they weren’t good. Sears stores reported a 12.8% drop in sales. The Limited saw sales fall 10%. One of the few retailers to actually grow sales, Wal-Mart, still missed analyst expectations. Wal-Mart grew sales at a 1.7%, when analysts were expecting growth of 2.8%
 

Now, I’m not sure what analysts were basing their expectations on, but it’s clear they were too optimistic. I wonder if investors were as optimistic.

Reader Mail

As you can imagine, I’m thrilled that people have made some money from Daily Profit stocks. And I want to point out, also, that I’m not in any mood to hold stocks long-term. With the markets stuck in trading ranges and the economic picture still very unclear, I believe it’s prudent to take profits when they’re available.

Happy New Year

Economically-speaking, we’re closing out 2008 on a down note. December consumer confidence dropped to the lowest level in 41 years.

2008 Predictions

Two more days and we’ll put 2008 behind us. 2008 set a number of stock market records, none of them good. I came across a Business Week article highlighting some of the worst predictions for 2008.

Reader Mail

I hope everyone had a great holiday. There’s nothing like a few days off work to connect with friends and family and recharge the batteries. Next week, we all get back to a regular schedule. And there’s a lot of work to do as we look forward to 2009. But before we get to that, here’s the next round of reader mail I promised you last week.