Morgan Stanley: The financials have been very weak lately. I looked at Morgan Stanley today and found that, if looking at a weekly chart, it has only traded below its current level for a full week once since the 1990s. While the low in 2008 was lower than the current price, it was not there for long. Considering just how bad things were in 2008, it is incredible that there was only one week when it traded below today’s price for a whole week.
EK: I made a note Friday to talk about Eastman Kodak and its looming bankruptcy. On Friday, the news was that they were most likely going to have to file for bankruptcy, driving the stock price from $1.75 to almost fifty cents. Since then, the company has come out and said they have “no intention to file for bankruptcy.” Today, the stock price has more than doubled since the low on Friday.
It is always sad when a past “blue chip” gets to the point where they are on the verge of bankruptcy. Eastman Kodak was once in the Dow Jones Industrial Average and has been in existence over one hundred years.
Eastman Kodak (Since 1974)
Q3: Q3 was an ugly quarter, with the S&P 500 dropping 14 percent. It was the sixth worst quarter since 1974. The others, not surprisingly, were 1987, 1990, 2001-2, and 2008.
Market Today: After an extremely rough third quarter, the market began Q4 with added weakness. Stocks across the board were down. Financials and economically sensitive stocks were particularly weak. Some of today’s weakness may have been a result of quarter-end funds flowing out of stocks and into things like treasury bonds and gold which were both up today. Since July, equal weighted indices are down over thirty percent.
The chart below shows an equal-weighted Russell 3000 index of companies with no net debt. One might think these companies would have been slightly insulated from the recent carnage, but that has not been the case. This index is down 31% since July.
Russell 3000 Equal-Weighted No Debt (One Year)
Have a good day! Brent
