Worst January In History?
It’s official; this January will go down in history, at least for now, as the worst January in the history of both the Dow Jones Industrials and the S&P 500. For the day, the Dow ended the day down 148 points, or 1.8%, while the Standard & Poor 500 index lost 19 points, or 2.3%. The Nasdaq composite lost 31 points, or 2%. For the month, the Dow lost 8.8% and the S&P 500 lost 8.6%; the Nasdaq’s actually beat last year’s loss of 9.9%; success!
I’m on the board of a nonprofit organization, acting as its finance chairman, and we looked at today’s year end figures for our pension investments. What we showed is that the three bonds we have some money in gained on an average of 2.1% for the year, which was nice. However, on the money market accounts, we lost an average of 39% for the year; ouch! At least none of our money was with Bernard Madoff.
Of course, though there were some rallies with the market, the unemployment news didn’t help. Caterpillar announced it is cutting another 2,110 on top of the 20,000 job cuts they’d already announced earlier this week. Japanese electronics firm NEC Corp (I hadn’t thought about them in years) said it was cutting 20,000 jobs. Overall, there were announcements for over 100,000 layoffs this week, including Starbucks, Boeing, Eastman Kodak, and Target.
Of course, it wasn’t all bad news. Oil companies made a killing, even if they didn’t see it totally that way. Exxon Mobil reported the largest yearly profit in U.S. history, earning $45.22 billion, even though its fourth-quarter profit fell 33% from a year ago. And Chevron reported higher quarterly earnings that topped estimates. They weren’t alone, though, as both Amazon and Proctor & Gamble posted high profit numbers, although, it seems, analysts still weren’t happy with P&G; can’t please everyone, I suppose.
All that, and the Republicans might shoot down the stimulus package; isn’t that just great (sarcasm mode inserted here)? Well, according to some financial analysts, it is. Some of them don’t think it’s close to enough to make an impact. Some of them don’t think it’s taking enough things into consideration. Personally, I think anything that’s recommended with the intention of helping to create jobs is a good thing, but I’d have to admit that I believe there are some items that either should be reduced, or shouldn’t be part of the package, such as the $68 million going to help some people get converter boxes for the change over to digital television. True, I’d be lost without access to TV, but I’m just not sure that its being part of the stimulus package is a good thing; what jobs will that stimulate? Actually, President Obama’s cabinet believes it will stimulate jobs by helping to create help centers to work with people on setting these boxes up. I’m thinking that’s not quite what we were thinking about when we were talking about creating jobs; how long term could that be?
Anyway, it was a tough month, one that I’m sure a lot of people are willing to leave way behind in their minds. However, I’m not thinking anything is going to change in February that’s going to stem the tide just yet, which means we could be looking at another record, in the wrong direction. Sigh!