New, Old News: U.S. Declared in Recession |
The week started off with a huge market drop, giving back more than half the gains from last week as the National Bureau of Economic Research declared an economic recession has been in progress in the United States since December 2007. Wall Street regained some in back to back sessions, only to be dragged down after announcements from multiple blue chip companies of more than 20,000 job cuts Thursday, ahead of Friday's big monthly employment report from the Labor Department. Oil continued its slide to a new 4 year low, falling under $45 per barrel.
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This Week's Stock Review:
The market has started to show signs of a bottom but we are going to continue to do our homework on companies that can prosper or at the very least, beat the market even in volatile bear markets. We do this by looking at stable dividends and products that will not be hurt by weak consumer confidence. There aren't many stocks that fit that bill, but we found a good one. For our Bear stock recommendation, we found an article that gives great insight into how a one time investor's darling stock has fallen and will continue to fall based on the ongoing credit crunch. |
Bullish:
Consolidated Edison (ED) - Electricity is in no danger of facing a decline in demand as the number of New Yorker continues to grow along with their appetite for electricity. This company actually has the potential to grow its monopoly as it has started offering green energy options. This large stable utility also pays out a healthy 6% dividend, making it as safe a company as one can invest in right now.
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Bearish:
Mastercard (MA) - Credit card transactions are headed for a sharp decline as the credit card market is the next to feel the pain of the credit crunch. Mastercard's stock price has been hurt by the drop in the stock market in general, but for the most part, their business model had been safe from the credit crisis, as it passes the actual debt to bigger financial institutions and makes its money on transactions. MA is about to feel the affects of a drastic slowdown in spending and in credit card use as consumers exhaust credit limits and banks increase requirements and decrease credit amounts.
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