Market Recap for January 5, 2009

Hope for last week’s rally to continue into the first full week of the New Year were doused when the Dow closed down 81.8 points (.91%). The two big stories of the day were the release of U.S. automaker car sales and Obama’s talks with congressional leaders.

Almost exactly on line with analysts’ estimates, US auto sales fell an appalling 36% in December. Despite the bad news GM was up 1.64% Ford gained 4.88% on the day. The poor numbers left many people to question the effectiveness of the rebates and near-zero percent interest rates that were given towards the end of 2008. The customer-enticing financing was made possible by government handouts given at the end of last year.

President Elect Barack Obama advocated for his stimulus package and other matters today in Washington. Obama spoke with both Democratic and Republican congressional leaders regarding his proposed American Recovery and Reinvestment Plan as well as interesting new plans for 300 billion in tax cuts.

The downward movement on today’s markets suggests that investors are still hesitant despite the news of the stimulus package and tax cuts. Expect some more bad news from unemployment figures and quarterly reports later this week. Not to depress you or anything.

 

-Matt Schwartz

College Trillionaire