U.S. Stocks Before and After the Swear-In

January 20, 2009

At 16:00 GMT, an hour before the noontime transfer of presidential power, the Dow Jones Industrial Average was down 1.9% on the day at 8112, and it had an identical quote two hours later, one hour into the new presidency.  In an inspiring 18-minute address, President Obama promised that America’s hard and many challenges will be met.  He also said the the problems are serious and would not be overcome soon.  Several false plateaus have come and gone in this saga, and many investors are unprepared to return to a market that has swallowed up resources for retirement.  Roosevelt’s observation about fear did not usher in prosperity.  Neither will inspiring words in the present crisis, but it’s a start.  The stock market’s low was hit some seven months before Roosevelt’s inaugural, having fallen for four years.  This time, it has been only 15 months since the market peaked, and new lows may still lie ahead.  Economic recovery is not yet in sight.  By coincidence, the DOW’s 15.7% decline from Election Day to its 8112 quote at 18:00 GMT today practically matches the 15.8% drop between the failure of Lehman Brothers in September and Election Day.  The lowest closing in this bear market, 7552, was set on November 20th.

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