Showing posts with label bank upgrade. Show all posts
Showing posts with label bank upgrade. Show all posts

Happy Birthday TARP

bank failuresThis last week marked the year anniversary of the passing of the TARP program, which has been the government slush fund to help bailout suffering companies and large banks. It is amazing to look back on the past year and just how far and wide those TARP funds have reached. These mixed with other government acronym funds have been the source for trillions and trillions of dollars that have been flushed into the market to help build a damn to try and stop the rapid declining economy. For a time, the damn seemed to hold strong, however, I believe we are about to reach the next round of this downturn.

Friday's unemployment report was very discouraging, as the actual result came in at a loss of 263K jobs after analysts were expecting a loss of 175k. The market reacted with slight selling as I believe the big loss was anticipated after the ADP estimate that came in worse than expected earlier in the week. Last week as a whole, spent most of the time in the red as investors are questioning just how quickly we will be climbing out of this hole.

So far on Monday, investors have been buying as financials are performing quite well. Goldman Sachs upgraded large banks (big surprise) to attractive from neutral, despite two more bank closures that took place this weekend. We are just about to hit the 100 mark for the year, which is the most since the Great Depression.

It will be very interesting to see if the market is able to rebound from last week's discouraging data and performance. This week is light with factoring economic data, so disappointing days will most likely be a minimum. However, pressure on retailers continues to build as unemployment is rising and consumer spending is falling and we are heading back into earnings season. I expect the holiday season will prove to be a "last battle" for many retailers hoping to take advantage of holiday cheer spending before handing over the keys.

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