Finally, A Rally!
Jul 15, 2009
Posted by Jody Eisenman | Filed under Uncategorized
After about a month of fairly steady declines, the market finally broke out to the upside today to the tune of 185 Dow and almost 22 S and P points. The major catalyst appeared to be the pre-market comments of Meredith Whitney. Whitney, who left Oppenheimer last year in order to start her own firm, achieved a well deserved level of notoriety for being one of the first analysts to turn negative on Citicorp and other banks. Today, however, Whitney was much more upbeat, making positive comments on the banking industry, at least for the short term. The money center banks responded in kind, rising 6.65% for the day.
On the other hand, Whitney stated that the unemployment rate could reach 13% by next year. When President Obama was elected last November, this rate was 6.8%. When he took office in January, it was 7.6. It has risen every single month since then, (although, admittedly, it didn’t rise quite as sharply last month) and is currently at 9.5%. According to the bureau of labor statistics, this is the highest number since 1983. In fact, if we get to double digits (which is something that many economists are now forecasting), it will be the highest number since the early 1940s. It’s pretty clear that the economy is not going to turn around as long as so many people are out of work.
