The week begins with a bang, according to the Financial Times. The FT reports that, “The Obama administration is gearing up for a ‘big bang’ announcement within the next two weeks that will combine a bank clean-up with measures to reduce home foreclosures and probably steps to kick-start credit markets.”
With the U.S. credit markets in lockdown mode, a whipsaw stock market that keeps anyone from getting too comfortable, a banking sector in chaos and a recession that clearly won’t be ending any time soon, U.S. dealmakers are looking at a market for mergers and acquisitions that’s in a virtual deep freeze.
Retail sales disappoint…. Chuck’s views on the Lone Prop… Waiting on the ECB… Emerging market currencies sell off… And Now… Today’s Pfennig!
Government bonds flourished as commodities and equities plunged in 2008. But Theo Casey says a new bull market in corporate bonds could soon take its place. As investors seek higher returns than Treasuries, demand for high-grade corporate debt, particularly if backed by the government, could soar.
Give us Madoff! Give us Madoff! “Oil rises to $39 on Bernanke comments…” “Asian stocks rise after Bernanke remarks…” When they turned out the lights and closed the doors in New York last night, the Dow had lost 25 points and oil had gone down to $37.
Warning that the timing of an economic recovery is “highly uncertain,” Federal Reserve Chairman Ben S. Bernanke said yesterday (Tuesday) that an economic stimulus program might not be enough to do the job. Bernanke went on to say that the government might have to buy or guarantee banks’ toxic assets to revive growth.
This year’s healing process will begin in the credit – not equity – markets, says Eric Roseman. Even if a big bear market rally emerges, uncertainty and volatility will still plague stock markets. Meanwhile, investors in high-grade corporate bonds can receive historically high dividend payments while they wait for prices to recover.
It’s prime time for small cap investing, says Louis Basenese. Investors need to look for companies with little or no debt and a competitive advantage in their particular field. Louis says E-House Holdings (NYSE:EJ) and American CareSource Holdings (Nasdaq:ANCI) fit the bill, making them great buys right now.
The economic calendar wastes no time getting off to a busy start in the first full week of 2009. The Construction Spending report for November this morning leads off the week, and carrying over from last year, it should show a continued slowdown. Until the housing market stabilizes, and the credit markets unfreeze, money simply won’t be spent on new construction. Since neither of those options looks likely to occur anytime soon, 2009 could be another long year for the construction industry.
Oil falls after two sessions of gains… Israeli offensive goes into fourth day… OPEC output set to fall further in December
