Markets declined on weak economic news. Dow was down 86 (putting it more than 1000 points lower than it started on Jan 1), decliners ahead of advancers 2-1 & NAZ down 20 (putting it 385 points lower than it started at on Jan 1). Instead of focusing on credit crunch problems today, a report showing personal spending at its weakest growth in 17 months & a profit warning from JC Penney (JCP), down 3.04, raising concerns about a US recession weighed on the markets. The FED announced it will auction off $100B in April, it's way of helping banks get thru the credit crisis. This is after they have already provided $260B to commercial banks. Oil pulled back to under 106 as concerns about the Basra situation subsided & on strength of the dollar. Analysts don't agree on the future of oil prices, but these levels have to hurt a struggling economy.
I just came from a meeting with a top money manager who sees junk bonds as offering value. The yields are triple the 3.47% rate on the Treasury bond. They feel the default rates will be less severe than some are forecasting. As a result, present yields offer value for those willing to assume a little extra risk.
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