Tuesday - June 16, 2009

The market dropped second day in a row. S&P500 has dropped -3.6% since yesterday. Crude oil fell -$0.15 to $70.47 a barrel.
Building of new homes and apartments rose 17.2% in May, highest in the last 3 months. A large percentage of it comes from multifamily housing. This raises the supply and demand issue - the unbalanced one. There is already a huge back log of existing homes which will take 10.2 months to deplete (we've talked about it in my previous blog here). Adding more new homes to one side of the equation might not be encouraging to the market. It will drag house prices down more.
The Federal Reserve said industrial production dropped a larger-than-expected 1.1 percent in May as the recession hurt demand for manufactured goods including cars, machinery and household appliances.
Bestbuy (BBY) reported a weak Q1. Earning per share is better than expected but sales fell more than expected. BBY says it is expecting a difficult environment. Its stock fell 7%. BBY is the first major retail to report Q1. I guess we have a taste of how the retail market has been doing.


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