STOCKS COLLAPSE ON WORST INAUGURATION DAY FOR EQUITIES. FINANCIALS CONTINUE THEIR APPARENT QUEST FOR ZERO VALUE.
U.S. Equities were unable and/or unwilling to take heart from the calm inaugural ceremonies. The continued destructive surprises offered by elements of the financial sector certainly made an effort to rain on the parade of the Inaugural ceremonies. The market appears to be offering the question through its words and actions “Are financials going to zero?” Based on the performance today, it would appear that they have come reasonably close, with stock prices barely reflecting value above the costs of the tables & chairs.
Citigroup fell an additional 20%, building on its continued fall from last week as analysts forecast greater than expected losses for the soon to be divested banking institution. Citigroup responded by announcing a shiny new penny (1 cent) dividend as a response to its challenging business environment. State Street Investments dropped by nearly 60% on a massive drop in 4th quarter profit and concerns regarding its level of unrealized losses. Pressure from financials and energies drove the major indices to levels that appear to be setting up to test the lows of November 2008. Despite the overall negative sentiment, after market earnings offered some bright spots. Perennial outperformers IBM and Bank of New York Mellon managed to post better than expected earnings. This could offer some offsetting positive perceptions of the market, reestablishing the notion that business has not come to a complete standstill throughout the world.
Technically, equity futures broke through major support levels and are poised for a possible retest of the November lows. March Dow Futures should test 7850 as a possible support level, with 8075 as resistance.
EQUITY RANGES
OPEN
HIGH
LOW
CLOSE
CHANGE
DJH9 (MARCH DOW)
8175
8190
7870
7945
-298
SPH9 (MARCH S&P)
838.80
840.40
797.00
806.00
-42.50
NDH9 (MAR NASDAQ)
1189.00
1193.50
1130.00
1147.50
-49.50
Prepared by Rich Roscelli & Paul Brittain.
Past performance is not indicative of future results. The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities.
