Two Ways: Joy Ride Over for Automakers?
Strengthen your portfolio in good times and bad.
The Future for Automakers Darkens
President Barack Obama has forced out General Motors (GM) CEO Rick Wagoner, and has determined that neither GM nor Chrysler have put forth viable plans for restructuring. The Wall Street Journal reports the administration's auto team, which has studied the carmakers for over a month, put out a final report saying their best chance of success "may well require utilizing the bankruptcy code in a quick and surgical way."
Chrysler's outlook is the gloomiest for now. The company has 30 days to work out a deal with Italy's Fiat SpA. If successful, the government may provide $6 billion more in funds. If not, it will be allowed to fail.
From the Bull Pen: The bull case is that weakness in the futures this morning was predictable on account of the fact that it's the end of the quarter. Caterpillar (CAT) pulling back to $27-$28 could present an upside opportunity. If and when.
From the Bear Cave: The bear case is that the S&P 500 is giving up too much too fast. One can consider Amazon (AMZN) for a downside play. A buy stop can be set near $72-$73.
Quick Check Around the World
Asian trading closed with the Hang Seng -4.70%, India -4.78%, Nikkei -4.53%, Taiwan -3.34% and Shanghai -0.69%.
Glancing towards Europe, we see the CAC -2.24%, DAX -3.11%, FTSE -0.67%
As of 8:15 AM EST, S&P Futures are trading -17 to 798, and Nasdaq futures are -21 to 1234.
A Look At Commodities
Crude oil is trading -1.64 to 50.74. Gold is -9.40 to 913.80. Silver is -0.25 to 13.010, and copper -6.10 to 177.50.
The dollar index is +0.505 to 86.0850.
On the Radar
10:00 Dallas Fed Manufacturing
Click here for the full trading radar.
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