December 26th, 2008
11:59 AM ET

Financial Dispatch: Retail's Rough Ride

Gene Bloch
Managing Editor-CNN New York

So how rough was the holiday season for retailers? Pretty rough according to early figures from Mastercard’s SpendingPulse, which estimated sales declined year-over-year by 5.5% to 8%. A good part of that decline in total sales can be blamed on plunging gas prices, but any drop is bad news.

In a separate survey from ShopperTrak, the key Saturday before Christmas, or “Super Saturday” as some call it, saw a scant half percent increase compared to 2007 levels, while foot traffic was down 17%.

Retailers want some help from the federal government next year. The National Retail Federation is seeking a series of sales tax-exempt shopping days added to Obama’s planned economic stimulus package.

Three periods in 2009 during March, July and October would be tax-free, and the federal government would reimburse states for lost tax revenue. The NRF estimates total savings would be $20 billion, and $175 per family.

Gas prices continue to dip – today marks the seventh consecutive decrease. AAA reports regular unleaded gas fell 6-tenths of a cent to $1.64 a gallon, a fresh 4-1/2 year low.

Filed under: Finance • Gene Bloch
December 24th, 2008
10:34 AM ET

Financial Dispatch: Economic Stats Mostly Bleak

[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2008/images/12/16/art.market.anon.jpg]
Gene Bloch
Managing Editor
CNN New York

There is no sugar coating it, today’s economic news is mostly bleak. The number of people filing jobless claims for the first time jumped 30-thousand last week to 586-thousand, a new 26-year high. Any number above 400-thousand is a sign of a troubled economy. As jobs weaken, incomes decline. Personal income in November fell 2-tenths of one percent, and spending was down 6-tenths of one percent, the fifth straight monthly decline. Durable goods orders fell 1% in November, not quite as bad as expected.

One bright spot: mortgage rates. The average 30-year fixed rate as tracked by the Mortgage Bankers Association fell to 5.04% last week, the lowest level since 2003, when the rate bottomed out at 4.99%. Lower rates triggered a surge in applications and refinancing. They’re at low levels but we’ll take it.

A short trading today on Wall Street today this Christmas Eve. The action ends at 1p, there is no trading tomorrow of course, and a full day is set for Friday.


Filed under: Bailout Turmoil • Economy • Gene Bloch
December 23rd, 2008
11:34 AM ET

Financial Dispatch: Econorama

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Gene Bloch
Managing Editor
CNN New York

“It could have been worse” has often struck many of us as a silly expression. Couldn’t anything on earth always have been worse?

Maybe those who use it are trying to offer some measure of comfort in a difficult situation.

With that thought in mind, this morning we received a slew of economic news, and while it was pretty bad, it could have been worse.

First off, sales of existing homes tumbled 8.6% in November, a steeper decline than expected, and the median price of a previously-owned home slid 13.2% from a year ago to $208,000. That price decline is the biggest since the Great Depression.

Sales of new homes were down last month by 2.9%, which is also worse than expected.

A key measure of consumer confidence meanwhile showed unexpected improvement. The Retuers/University of Michigan revision for December showed a nearly 5-point increase in its index. How to explain the increase? It’s people feeling better about lower prices. One in four people according to the survey expect declines in prices, which is more than any time since the 1950’s according to the survey’s director, Richard Curtin.


Filed under: Bailout Turmoil • Economy • Gene Bloch
December 22nd, 2008
10:51 AM ET

Financial Dispatch: Obama beefs up economic recovery plan

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Gene Bloch
Managing Editor
CNN New York

We’ve all been there – a vacation that’s supposed to be relaxing, but the stresses of the job intrude. President-Elect Obama, on vacation with his family in Hawaii, has a lot to think about with less than a month to go before inauguration. Obama this weekend expanded the goal of his economic recovery plan, which will now aim to create 3 million jobs, up from 2.5 million in the original version. That news comes as this weekend Vice President-Elect Joe Biden took to the airwaves and pressed the need for a recovery plan, saying the U.S. economy is in danger of “absolutely tanking.”

The malls were humming with holiday shoppers this weekend, but discounts were steep and profits likely thin, as retailers struggle with one of their toughest seasons in memory. We’ll find out how Americans are feeling about things Tuesday morning with the University of Michigan’s preliminary report on consumer sentiment. It’s among the slew of reports crammed into the first three days of this holiday week. The trading week is a short one on Wall Street, with a 1p closing bell on Wednesday, no trading for Christmas Day of course, and then a full day on Friday. In the early doing this morning, the Dow is near the break even mark (down 4 as of this writing).


Filed under: Bailout Turmoil • Economy • Finance • Gene Bloch
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