The Four Sisters started the week on firm ground led by a sharp rally in energy, mining, and financials. The improvement in credit rates served as a catalyst but the rally soon stalled on poor economic data. The SPX fell down to its neckline at 900 and so far has been able to hold this important level. If this level holds, we expect to see some relief heading into year end. However, a breach of 900 would signal another retest of the October lows. Risk remains very high in both directions.
The Department of Labor reported a loss of 240,000 job loss in the month of October, worse than economists expected. The jobless rate spiked to 6.5%, the highest in 14 years as the economy continues to deteriorate at a rapid pace. (11.7)
General Motors (GM) reported a $2.5 billion loss in the third quarter as the company warned that it could run out of cash in 2009. Talks to acquire Chrysler have also been suspended. (11.7)
Tech giant Cisco (CSCO) warned this week that technology spending is falling sharply as corporate spending is tightening. Despite meeting estimates, Cisco gave a weak forecast that has many analysts predicting little growth for the tech sector in the coming quarters as the recession takes hold. (11.6)
Senator Barack Obama will be the 44th president of the United States after a historic win Tuesday night. Obama is the first black president and first senator since JFK in 1960 to win the election. Two days after his victory, Obama named Rahm Emanuel as White House Chief of Staff. (11.6)
