Thursday, April 2, 2009

Markets zoom past 8,000 but there is little data to support such a surge; be careful about reinvesting

The Dow has zipped past 8,000 in intraday trading despite the lack of data to support such a surge.

In fact, data just released today shows a personal financial and employment situation continuing to crater across the nation.

CNBC reports:

More U.S. consumers have fallen behind on loan payments than ever before, and the problem may worsen as millions more find themselves out of a job, a study released Thursday shows.

According to the American Bankers Association, which represents most large U.S. banks and credit card companies, the percentage of consumer loans at least 30 days late rose to a seasonally adjusted 3.22 percent in the October-to-December period from 2.9 percent in the prior quarter.

The ABA said the fourth-quarter rate was the highest since it began tracking the data in 1974, with delinquencies rising in nearly every category. It said these credit trends are unlikely to improve before 2010.

"Job losses have really hurt the economy and will continue to inflict pain for several months," James Chessen, the ABA's chief economist, said in an interview. "The greater the losses are, the more severe an impact it has on all credit markets."

The ABA study covers direct auto, indirect auto, closed-end home equity, home improvement, marine, mobile home, personal, and recreational vehicle loans. It excludes bank credit card and education loans.

A report issued Wednesday by ADP Employer Services said U.S. private employers shed a record 742,000 jobs in March, pushing year-to-date losses above 2 million.

Economists polled by Reuters expect the Labor Department to say on Friday that the U.S. jobless rate rose to 8.5 percent in March, a level not seen since 1983, from February's 8.1 percent.

I just don't find a lot of hope in those numbers to get back into the financial markets. But perhaps I am wrong.

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