The Dow is on the move up! Finally some good news out of Wall Street hit the wires recently, as the Dow finally turned north for the first time in many, many days. This turn is attributed in part to what has been lacking in the market all year – some good news in the financial sector. The CEO of Citigroup, Inc. released a memo to the Securities and Exchange Commission stating that for the first two months of this dismal year, his company is profitable and “is confident about its capital strength after tough internal stress tests.” Chief Executive Vikram Pandit told his staff in a letter that was filed with the SEC that Citigroup was having its best quarter-to-date performance since the third quarter of 2007.
Citigroup’s stock price has just recently been under one dollar for the first time ever. In 2006, it was considered the world’s largest bank, and the stock price was over $55/share. This bank has recently been regarded by analysts as being the “sickest of the big banks.” For it to say it is posting a profit for the first two months of this year, is good news indeed!
On Tuesday, March 10, 2009, the Dow Jones Industrial Average was up 379 points, which when compared to recent losses in the market, is a big move in the right direction. The markets were down over 25% since the first of this year as of late Monday.
This good news is long overdue. Much of this recent decline has been due to overreacting and over reporting of the situation. The news has all been negative concerning the market. Little has been said about how well the U.S. market has held up when compared to other nations around the world. In China, over 20 million jobs were lost recently due to the recession. In Russia, the market dropped 20% in one day and they suspended trading the rest of the week. The Russian stock index is down 62%! Other markets and economies around the world have been struggling worse than the U.S, including England, Germany, France, and Sweden.
We have had a year of declines here, but, look around you. The majority of people are still employed(unemployment is well below 10%), and those that aren’t employed have the hope of a stimulus package that will bring new opportunities for them in the months ahead. The local banks are still strong, and that is where a large amount of the money is in the U.S.
We don’t have long gas lines, oil prices are down, we don’t have huge unemployment lines, America has the largest economy in the world by far, we don’t have high inflation, we have a secure food chain. We have a lot of positives that we need to hear about, yet, those things get drowned out by all the doom and gloom news about the financial sector. There is much better news out away from Wall Street.
The company I work for had its biggest month ever in its 10-year history in January, 2009. We found out that our prospects will still respond to a good value offer on our products. Consumers are cautious these days. But, there is a lot of money being held out of the market by worried potential customers.
Consumers who have been watching the bad financial news are naturally hesitant about letting go of any of their hard-earned money. Now that some good news has hit the market, look out for what Larry Kudlow of MSNBC has described as “panic buying” on wall street and main street, as these cautious buyers begin to snap up low priced stocks on Wall Street and bargain prices on goods and services on Main Street. Hopefully, the direction will continue to be up for the DOW.
CNN Pandit Memo: Citi Profitable in 2009
Washington Post Citigroup Stock Sinks to $1 Per Share
Market Watch Russian Stocks Plunge 20%
International Herald Tribune 20 Million Migrants have Lost Jobs China Says
Post Star Local Banks Remain Strong