Morning Call

0 CommentsThursday • July 2, 2009 • by alwaters

“The only place where success comes before work is in the dictionary.”
Donald Kendall

It is the time of year when many families hold garage sales to get rid of unwanted items. General Motors is having a big one themselves, as the company looks to shed some of its more dubious assets. For sale are about 16 plants and associated properties throughout the country and a parking lot in Michigan. A 9-hole golf course is also available in New Jersey and a controversial and highly contaminated site in Massena, New York. The former foundry site will reportedly cost about $225 Million to clean up. If toxic real estate is your cup of tea, General Motors apparently has about 11 more available. Meanwhile a new lean and presumably mean GM is setting its sights on an IPO in 2010.

The Dow ran higher at the opening bell yesterday, but slowly sold off during the day. By the end of day, the indexes finished with a more modest half-point gain. Futures are down once again and are likely to worsen after employment numbers are released. The Asian markets traded lower by an average of 1%, although trading within sectors was considerably mixed. European equities are also averaging a 1% downside at mid-day.

Commodities are mostly lower this morning as economic sentiment continues to worsen. Crude oil has fallen by another Dollar, leveling off near $68. After a strong move higher yesterday, Gold has given back about $6 to $934 this morning. Unfortunately, today’s economic news is likely to further darken the mood and may lead commodities even lower. The Dollar is also rising on the Euro and Pound this morning, which often has an adverse effect on commodities.

The full economic calendar includes Initial Jobless Claims, Non-Farm Payroll, Average Weekly Hours and Earnings, the Employment Rate, and Factory Orders. The reports are likely to contain mixed indications, but the bottom line will point to further problems. On the earnings side, Acuity Brands is the only notable release on the agenda.

Unless you are short on the market in some way, this would be a good day to just wait and watch. We believe that we are at a critical point where some harsh realities are coming to light. We have believed, throughout the current crisis, that employment would be a critical factor and that the worse was not yet over. We will pore over the details of this morning’s data and discuss it, at length, tomorrow.

Posted in: Morning Call: Daily Analysis of the Global Markets and Economy

Tagged with: bonds, economy, gold, money management, oil, stocks, wall street