Weekly Recap - September 28, 2008

Motto: ““IF you can keep your head when all about you are losing their” … then you may not fully understand the problem.
Oh, the uncertainty! The promise is still there. The bailout, on the other hand, isn’t. What we get is promises, promises! The bailout was supposed to be finalized this past Thursday, then Friday, and now it’s Monday. You wanna bet? Why do we care when the $700 billion proposal comes? Because the markets will salute it with an upside swing. After that, more likely the markets will still display a healthy pessimism going into October. The signs of this week still show weakness in the economy: a rise in weekly jobless claims to a seven-year high near 500,000; a sharper-than-expected 4.5% drop in big-ticket items ordered; an uptick in the 30-year mortgage rates. On the bright side, there is a sense that the bottom is drawing closer. The investor sentiment could not be worse. The panicked flight from private-sector assets into Treasury bonds has at least given the government more ammunition to fight the credit crunch. Analysts’ revisions are about to capitulate. The ratio of analyst upgrades has fallen to just 34% of total estimate changes, the lowest since mid-2002. A rally is in the cards when the analysts are revising down their estimates.
All major indices ended the week lower.
The Dow Jones (DJIA) ended at 11,143.13, down 2.15% for the week. The NASDAQ ended at 2,183.34, down 3.98% for the week, and the S&P 500 ended at 1,213.27, or -3.13%.

Other news:
- Washington Mutual (WM) is the latest victim on the financials front. The company was seized by the federal regulators and its assets sold to JP Morgan Chase (JPM)
- Wachovia’s (WB) shares took a dive of 27% on Friday during regular business hours, and another 10% in after-trading hours, on concerns about another big mortgage-related write-down.
- Microsoft (MSFT) authorized a $40B stock buyback over the next five years, the largest ever. The new program replaces the a previous one, now completed. Hewlett –Packard (HPQ) follows suit with $8B stock repurchase program, in addition to the last year’s $8B, of which there is $3B remaining. Nike (NKE) also announced a $5B stock buyback program.