Apire Misery Index for the Week Ended April 24, 2009

April 25, 2009 – All things being equal, stocks held up pretty well in a busy week of earnings season, on a cautiously widening sense that the pace of the erosion in the economy may be slowing down – and indication that we are turning the corner? Time will tell, but it is tough to get to hopeful when the labor market continues to show signals that unemployment is on the rise. Contrary to many, if not most experts and pundits, we think unemployment is a leading, not lagging indicator.  

In terms of market performance, the DJIA closed down 52.65 this week, less than 1%, the NASDAQ closed up 52.94, or 3.2%, while the S&P 500 closed down 2.04, basically flat.

·         Leading Indicators – The Conference Board reported that it monthly forecast of economic activity fell 0.3% in March (expectations were for a 0.2% decline).

·         Weekly jobless claims came in at 640,000, the twelfth straight week over 600,000.

·         Housing Markets – The National Association of Realtors said sales of previously owned homes fell 3% in March to an annual rate of 4.57 million, lower than forecast. The median price fell 12% on a Y/Y basis to $175,200.

·         Profit Warnings – Merck, Caterpillar, Lexmark, Air Products, Lennox, Thermo Fisher, Bunge, ITT,

·         Job Losses – GM (1,600 jobs), Brown Forman (250 jobs), Robert Bosch (225 jobs), Sun Times (140 jobs), Lexmark (360 jobs), Yahoo (laying off 700 workers), OshKosh B’Gosh (about 100 jobs), Cognex (85 jobs), T Rowe Price (288 jobs), Chicago Tribune (53 jobs), Philip Morris (1,100 jobs),

·         Ratings Cuts – Fitch cut PepsiCo, Moody’s cut Green Valley Ranch, Moody’s cut Chrysler, Moody’s cut BB&T, S&P cut Zions Bancorporation, Moody’s cut Dow, Fitch cut Caterpillar, Moody’s cut SunTrust, Moody’s cut OfficeMax, S&P cut Marshall & Ilsley, Moody’s and S&P cut CIT Group, Moody’s cut American Express,

·         Closing the Doors – Philip Morris is closing its North Carolina plant, GM is shutting down 13 assembly plants for up to 11 weeks this summer (affecting about 24,000 workers),

·         Chapter 11 – Dayton Superior,

·         VC Investments – VC Investment in Q1 fell 61% to $3 billion – the lowest level in 12 years.

·         Auto Industry – Chrysler has less than a week  (April 30) to the government deadline to get lenders to convert out a significant amount of debt for stock.

·         Banking Industry – Four more banks failed this week, bringing the total number of bank failures to 29, surpassing the total number of failures in all of last year.