We warned last week that Friday's reversal lower after the bailout package passed the House did not bode well for the bulls especially given the terrible condition of the credit markets. Boy, did that statement ever come true. The Four Sisters experienced their most violent sell-off in recent memory as the DJIA, the eldest sister, plunged 18.2% for the week, even after a late day rally on Friday. Markets are at levels not seen since 2003. Risk remains high as the credit markets remain frozen. However, in times of crisis there are opportunities and we will continue to act accordingly as the crisis continues to unfold.
The global stock market panic continued on Friday bringing Wall Street titans Morgan Stanley (MS) and Goldman Sachs (GS) to new 52-week lows. The Group of Seven is currently in Washington D.C. this weekend trying to figure out the next steps to tackle the crisis after a joint interest rate cut earlier this week. (10.10)
General Motors (GM) plunged 31% on Thursday to its lowest level in 58 years after Standard & Poor’s said the car maker’s credit could fall to junk status. Shares of Ford Motor Company (F) are also under considerable stress as bankruptcy looms for both companies. (10.9)
The government increased the loan it will give to the world’s largest insurer American International Group (AIG) from $85 billion to $122.8 billion as the company tries to sell assets to pay off the loan. (10.10)
General Electric (GE) reported a slide in 3rd quarter profit as the global credit crunch continues to hammer companies tied to financing activities. (10.10)
Crude oil plummeted to a new 13 month low, below $79/barrel as investors continue to worry about a prolonged global recession. (10.10)