Ben Bernanke,
Chairman of the FED, in a speech in Spain signaled future interest rate cuts are unlikely largely because of an improving economy later in the year. The markets are mixed, not sure how to take the message. Oil prices are kicking around the 126s, a little better but still a huge problem for economies around the the world. An early measure of how high oil prices are affecting the rest of the economy,
General Motors, (GM), a Dow stock, up 31¢, announced in reaction to slumping sales of pickups SUVs brought on by high oil prices, they are closing 4 truck SUV plants. Instead, GM will build a small Chevrolet car at an Ohio plant in mid-2010 the Chevy Volt electric vehicle in Detroit. More announcements are coming of companies redirecting capital investments following high oil prices.
Lehman Brothers, (LEH), has been under a cloud since the early days of the credit crunch, almost a year ago as shown in the chart. They are evaluating options, including raising $3-4B in additional capital because of a loss which may be worse than the expected $300MM.
This news follows the downgrades for major financials which took the markets by surprise, times continue tough for financials.
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