Dont be fooled by the small decline on the Dow and the gain on the Nasdaq....sentiment in the US continues to be negative.   The intra-day chart of the Dow shows how volatile the market was with a push in the last hour of trading which brought share prices off their lows.  By the close the Dow had shed 64 points to 7936.8 while the Nasdaq had a surprising gain of 18 points to 1494.

The weakness in the Dow was earnings driven starting with Macys announced an expected decline in same store sales of 6-8% for 2009.  It was also cutting 7000 jobs and reducing dividends to 5 cents from 13.5 cents.   Morgan Stanley announced more job cuts of 1500-1800 on top of the 7000 laid off last year.  Financial issues remained weak with Bank of America down 8% and GE down 4-5% on concerns about GE Capital.  The chart below on Bank of America shows how badly the stock has fallen.  I believe Singaporeans own Bank of America shares at around the US$23 level compared to the current price of US$6.00.

Tech stocks were firm and this accounted for the 18 point rise in the Nasdaq to 1494.4.  Intel provided support with a gain of almost 6%.  I heard on the radio that there was bargain hunting of chip companies as some investors are beginning to feel that the worse is over.  This is ironical because i had breakfast with some semi con equipment companies yesterday and they informed me that the global semicon companies had indicated that there would be no orders until Q4-2009.  Production was being pulled back to the US.....probably early signs of protectionism.  This view makes sense because we see more layoffs in the coming months from poor business or even corporate consolidation.  Unless there is enough job creation to take up this supply, we can only expect unemployment rates to rise and with it further declines in consumption.  The figure of 20mn migrant workers being unemployed in China confirms the reports that I have heard about massive corporate closures in Southern China - mainly exporters.  Even Chinese Premier Wen says that the worse is yet to come.....although he believe he can see the light at the end of the tunnel.......he must have better eyes than me because I cant see anything yet and even that light which Wen sees seems to be predicated on the major global economies and their central banks undertaking concerted action - fiscal pump priming and loose monetary policy....this is still at the rhetoric level so we can affford to be sidelined and wait for more bad news to surface.