New General Motors emerges from Chapter 11

Markets started weak & selling continues. Dow is down 83, decliners ahead of advancers 5-2 & NAZ is off 10. Banks are sharing in the decline. The 150 level has been a major ceiling/support line for most of this year. By May 1, it blasted thru, converting it from a ceiling to a floor. But in July, the floor concept has taken hold. Today it cracked that line again & is sinking as I write.

S&P 500 FINANCIALS INDEX

Value 148.82

Change -2.44

% Change -1.6%

MLPs are strong ahead of the earnings reports which will begin next week. The index was up but just slipped to -0.25 (in a down market). REITs were lower while junk bond funds were mixed. However, Treasuries were very strong with the yield on the 10-year Treasury bond dropping 11 basis points to 3.31%. This may be a relief rally with new gov auctions taking a 3 week holiday. Treasury bonds are also finding friends on increased worries about the global economy.


Alerian MLP Index --- 2 weeks




10-Year Treasury Yield Index - 2 weeks




Oil broke thru the 60 resistance level. Concerns about future demand (from a sluggish economic rebound) in the short term are keeping buyers away.

CLQ09.NYM

...Crude Oil Aug 09

...59.47

... 0.94 .......(1.6%)

The new General Motors is clean of massive debt & burdensome contracts but the gov is now the majority stockholder. GM claims it will be faster & more responsive to customers than in the past, allowing it to make money & repay gov loans faster than required. GM said it would repay $50B in government loans ahead of a 2015 deadline. The new company arose Friday as the bulk of GM's assets were transferred to a company controlled by the gov. Its 40-day stay under court supervision was far faster than anyone expected.

•New GM Emerges From Remains of Bankrupt Automaker as Asset Sale Completed


U.S. consumer sentiment wilted in early Jul to the weakest since Mar, when confidence in the financial sector & economy were very low, according to the Reuters/University of Michigan Surveys of Consumers. Consumers' rising concerns about a protracted economic downturn, job security & erosion of wealth were the main factors depressing sentiment. The preliminary index of confidence for Jul fell to 64.6 from a final reading for Jun of 70.8. The Jul reading was well below economists' forecasts of 70.5 & the first fall since Feb. The survey's index of consumer expectations fell to 60.9 from June's final reading of 69.2.

•Consumer Sentiment in U.S. Falls More Than Forecast on Rising Joblessness


The gloomier outlook by consumers is dragging down stocks. The chart for the Dow illustrates the importance of the 8K level. It's being tested & next week should tell us if it can hold.

Dow Jones Industrials --- 1 year