filed in My Investments on Nov.25, 2008
Could this be the start of something nice? Today was a relatively flat day which still meant for three consecutive days without any major sell off.
Today on the Canadian side, some of the auto maker misery showed it face when the jobless data came out. In Oshawa, which is just east of my home in Toronto, had a 97% increase in unemployment! Oshawa is a major hub for GM workers and with a pending factory shutdown, current factory layoffs are now being reflected in the data at hand. This is similar to the Flint, MI problems of the past and its only going to get worse in cities in Canada and US. Hopefully as these further job cuts and downward trends increase, local governments as well as those on the state and federal levels can find solutions to create new jobs in new industries to prevent mass unemployment which is going to certainly cause a long term fiscal crisis.
Another story that has come out tonight is the downgrade in the credit rating of Toyota. Although I dont look at these credit ratings, the Asian stock markets are reacting negative to this news.
Third news that is going to affect the market on our side tomorrow is the rejection in the deal that many were hoping would go through. BHP has taken their billion dollar offer for Rio Tinto Group due to the downward economic trends globally. This is bad news for share holders that might be caught off guard when the sell-off ensues tomorrow morning. Look for heavy volume on both stocks.
I dont expect tomorrow to go into positive rally mode with the current news that is coming out with the above mentioned companies and based on the lower than expected GDP numbers which was actually 0.5 when leaders expected it to be 0.3 or less.
Expect also the US dollar heading lower with the announcement of another 800 billion bailout that was announced today. The plan is that the government is going to purchase bad bank assets (we have heard this before) and this funding will be basically done by printing new money. By printing new money, the currency is going to drop in value and anyone planning to hedge it against the Canadian dollar might be in for a treat.
Today I didn’t really play anything large, I purchased 100 shares of both Campbell Soup (CPB) @ $31.01/share, and Hewlett Packard (HPQ) @ $33/share. Both were limit orders and I know that there is a chance the price might go lower but looking towards the long run, these might be value prices.
Tomorrow I will be looking to jump into RIMM since its hovering at its low again, and also again at FRE (Freddie Mac) which is jumping like a frog afterhours based on the debt buy back from the government. Its currently at 0.69/share and based on the morning activity I might put in a limit order for 2500 shares and ride this wave. Another stock to look at is Borders which is dropping because of a drop in sales and weak profits. If I get into Borders, I will mention is ASAP so those that get my RSS feed will know.