Financials (S&P 500 FINANCIALS INDEX) & REITs were relatively quiet, while junk bonds sold off. They've had a nice run this year but are settling back on growing worries by sellers about the deteriorating economy & its impact on high risk bonds. Even the VIX reversed its climb to head south, dropping 1½ to the 47s. Oil was down pennies, but in the 34s it's at multi year lows.
The Alerian MLP Index was a star performer this year with a nice gain compared to continuing declines for most industries. Selling pressure is taking hold, shown in the 2 week chart below.
Alerian MLP Index --- 2 weeks
The Federal Reserve sharply reduced its forecast for the economy, contraction will be greater then the previous projections & unemployment will rise even higher. They expect the unemployment rate will rise to over 8½% (the previous estimate was for about 7½%) & the economy will contract in 2009 around 1%. Formerly the economy was expected to range between a very slow expansion to suffer a minor (0.2%) contraction. The last full year contraction for the economy was in 1991.
•Fed Cuts 2009 Growth Forecast, Sets 2% as Inflation Goal Over Longer Term
Jeffrey Immelt, CEO of General Electric (GE), will be a nice guy & give up his bonuses for 2008. Under his watch, beginning 2001, the stock has gone from the 50s to under 11 with a div which he has to constantly defend. Hmmm!
General Electric --- 10 years
Dow is sitting at the 7½K low from Nov. Today's performance shows it doesn't know what to do next.
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