| CLZ08.NYM | ....Crude Oil Dec 08 | ....56.37 | .... 1.87 (3.2%) |
Retail sales plunged 2.8% in Oct, the worst decline since record keeping began in 1992. This ties in with many who have been saying that after Sep 15, demand just fell off a cliff. A dreary economy & the credit crisis caused consumers to pull back on spending. The decline was led by a 5½% decline in auto sales, the worst showing in 17 years. Excluding auto sales, the decline was 2.2%, a record for that category.
•Retail Sales in U.S. Fell 2.8% in October, Most Since Records Began in '92
In Nov the consumer confidence inched up from the prior month's record low to 56.9 (up 0.3), as it remains near the 28 year low. The outlook is for more dreary numbers in coming months.
•U.S. Consumer Confidence Stays Near Lowest in 28 Years as Job Losses Mount
As I said yesterday, it looks like the Republicans are playing hard-ball on bailing out the auto companies. The idea floated around was that their finance companies (the connection with the bailout program) would receive $25B of the $700B in the bailout package. But the Reps are saying, not so fast. Dems are behind it while Reps aren't, we have to await developments. General Motors (GM), still a Dow stock, said they're not sure if they have enough money to remain alive thru next month.
•Auto Bailout Loans Are In Jeopardy as Top Republicans Oppose Legislation
FED Chairman Ben Bernanke said the Federal Reserve would work closely with other central banks to fix global financial problems, hardly a news bulletin. Plus future rate cuts will be considered. The chaos in financial markets is wearing down investors which will probably bring on more selling & fund redemptions, adding to selling pressure.
•Bernanke Says Central Banks Around Globe `Stand Ready' for Further Action
Speaking of financial chaos, Freddie Mac, now a penny stock, reported a $25B loss, 20x analysts expectations & up sharply from last year's 1.2B loss. As a result, they will ask for almost $14B in gov aid. 60% of the loss was due to writing down assets to market, the rest came from writedowns & credit losses. This loss follows the $29B loss reported by Fannie Mae at the start of the week.
J.C. Penney (JCP) reported Q3 EPS fell 52% to 56¢ (analysts forecasted 53¢) because consumers cut back on spending & took fewer trips to the mall. Sames store sales fell 10.1%. They are looking for a similar decline in Q4 with this ugly scenario continuing well into next year. The stock slipped 1.55.
Dow Jones Industrials --- 2 days
While writing this post, as shown in the graph, Dow has been selling off & looks like it wants to give back most or all of yesterday's 3 hour monster rally.
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