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 August 2008, Issue #29 Did We Bottom Out Yet? On Tuesday, July 15th, the Dow Jones Industrial Average fell below the 11,000 mark and hit a new two year low. The sell-off, which was caused by continuous concerns about the health of the banking sector, showed that investors were still uneasy with the collapse of IndyMac Bank on July 11th. IndyMac's collapse marked the second largest bank failure in U.S. history. Scrambling to save the market, the SEC battled against abusive short sellers and announced an unprecedented plan to curb "naked" shorting for 19 of the biggest financial stocks. So far the temporary ban, which was extended to August 12th, has helped stocks rebound from the new lows made last month. The question now is: Did we bottom out yet? TV's most loved and hated financial market pundit Jim Cramer has called a bottom and predicts that the Dow will not test the lows it saw on July 15th. Will he be right? We'll see. So far we have seen mixed indicators. The Federal Reserve decided to keep the Federal Funds Rate at 2 percent, indicating its larger concern for the weak economy than for rising inflation. Government-chartered mortgage financiers Freddie Mac and Fannie Mae both reported larger than expected second quarter losses, indicating that industry-wide write-downs of bad home loans are nowhere near the end. However, although the news from the two largest financiers of home loans refreshed concerns about the housing sector and economy, investors have been welcoming the recent drop in oil prices. After hitting record highs above $147 per barrel on July 11th, oil prices have slid to prices under $120 for the first time in three months. The low crude prices have been brought about by a strengthening dollar along with concerns of slower demand. As European economies suffer, the dollar has soared to a 6 month high against the Euro. There has also been growing worries that slower economic growth in the United States would cause lower global energy demand. What's New at Firstrade A wire transfer fee rebate has been announced. In addition, we are overhauling the Firstrade blog to give customers more insight into Firstrade. On the Roadmap
In every issue we take a quick look at a stock that has been in the news. Feel free to make suggestions as to what stock you would like to see covered next by sending an email to editor@firstrade.com, or the editor will pull a random symbol out of a hat. This month we take a look at Wal-Mart, the largest retailer in the world. Amidst the current gloomy state of the economy, Wal-Mart recently released July sales data that missed analyst expectations. Wal-Mart sales rose, but fell short of estimates. It wasn't just Wal-Mart that disappointed though. Roughly two-thirds of retailers that reported July sales missed Wall Street expectations. Consumers seem to remain cautious about discretionary purchases. Although the emergency government stimulus package helped lift the economy for the second quarter, the weaker than expected sales might indicate that the money may be running out. (Do we need a second stimulus package?) If you look past the short term uncertainties, Wal-Mart still presented solid numbers for investors. In fact, the company raised second-quarter earnings outlook well above the prior forecast. Wal-Mart is not only the largest retailer, but it is also the largest corporation and private employer in the world. Headquartered in Bentonville, Arkansas, Wal-Mart has more than 4,100 stores in the United States and 3,200 overseas. The company operates its retail stores in various formats worldwide. The Wal-Mart Stores segment offers general merchandise while its Sam's Club segment provides hardgoods, softgoods, institutional-size groceries and selected private-label items. The company's International segment includes various formats of retail stores and restaurants. Wal-Mart's operations outside North America have been highly successful in both South America and China. Let's take a look at some of the key events.  Key Events:
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