1.16.09

        The Financial Sector had a horrible week down another 16.5% for the week. Leading the way Citigroup and Bank of America.BOA closed the week at $7.18 and CITI at $3.50. If you are thinking of buying either of these stocks be careful, it may take several years to become profitable if they survive without going bankrupt. The Government gave BOA another $20 billion on Friday to go along with the $25 Billion they already received.

             Crude oil futures continue to encounter further selling pressure. Though they finished the Friday session 2.8% higher at $36.40 per barrel, crude futures are down roughly 11% for the week, and down nearly 19% for the month and we are only half way thru the month. February crude futures contracts expire next Tuesday.

            The core December CPI was unchanged, and has been net unchanged over the past four months. That indicates there is no inflation at the consumer level. Total CPI was down 0.7% as energy prices dropped for the fifth straight month. A large number of SP 500 companies will be reporting earnings next week which could hurt if some big names have any horrific surprises. Of course Obama will become President next week and that may give the market a temporary boost. It won’t take long for people to start realizing that he doesn’t have any magic powder to cure the economic ills of this country. We see nothing to change our outlook any time soon, but let’s listen to what he plans to do and see how it is received by the street.

            For now we will remain 100% in CASH.

Till next time

The MTA Staff