Markets may be facing tougher times

Never a dull moment with the car makers, Fiat Group is looking at acquiring General Motor's (GM) European business to be combined with what's left of Chrysler & their car businesses. We send our best wishes & hope they can come up with a profitable new car company which will be good for the global economy.

Fiat eyes new company with GM Europe, Chrysler- AP


Let's take another look at Dow, but from a 1 year perspective. After Dow took its plunge in the fall, it was able to live with 8K as the floor for a fair amount of time, Oct - Feb 09. Then it took its 09 plunge, reversing 8K from a floor to a ceiling. For a month, it has been hammering away at the 8K ceiling making only modest dents. Bulls will say this a base building period. In contrast, the Alerian MLP Index chart shows the plunges it took last year & this year. But it has come back strongly in 2009. The 3rd chart compares the difference between the flattish Dow vs MLP Index reaching new interim highs in the last month. My feelings are that reality from negative economic news will hurt both the Dow & high yield securities (i.e. MLPs, REITs, junk bond funds, etc.) which have been very strong in the last 2 months.


Dow Jones Industrials --- 1 year




Alerian MLP Index --- 1 year




MLP Index vs Dow --- 1 month




Banks have been leading the way up from the recent lows & should continue as leaders. But stress test worries may dominate investor thinking this week. From early signals, it looks like many of the 19 banks will be unhappy with conclusions about weak assets along with advice to raise more capital.