After the late surge in buying which occurred just as the Market was winding down on Friday last, we anticipated that Monday morning might be a buying day; and it was. Volume was up and all the major indices were up on the day. We took the opportunity to take positions this week on stocks we have been following closely. The numbers are listed below.
If we need any more signs that the good-ol-days in America are rapidly fading into obscurity, changes were made to the Dow Jones Industrial index which lists the 30 largest U.S. stocks. Travelers Insurance today replaced General Motors, and Cisco Systems replaced Citigroup. How about more...
An old friend to many Americans died this week. GM, which until last year was the world's largest carmaker, a 77-year reign, filed for bankruptcy protection. The king is dead, long live the king. GM plans to sell off it's unprofitable brands and close many factories and then come out of bankruptcy as a new, smaller company in 90 days.
GM's news was a boon to the Japanese futures market along with the release of U.S. manufacturing figures. The manufacturing figures were good enough to show signs the global recession is abating. This double scoop of ice cream raised optimism in Asia that Asian automakers will gain market share. GM's failure is an opportunity for all the Asian auto makers to grab a larger piece of market share. And, if the recession is abating then consumers will begin spending again.
On the energy front, the price of Crude oil for July delivery gained 3.4 percent to $68.58 a barrel, the highest price since Nov. 4 of last year. Again, we have been saying for quite some time now that Oil prices will eventually rise to significant levels. It is just a matter of time. For now, the price to consumers is manageable.
Today, the market did much of nothing. You might say things were "all quiet on the western front." I suspect that the Big Money is now itching to get in as those on the sidelines continue to see the market act in a choppy fashion, but nevertheless, continuing to move higher and higher gradually since the March lows. We will monitor the volume buying and selling, and act accordingly.
More on Friday!
