I suspect that there were some folks who were hopeful that excitement over the Obama ascendancy to president might spark a little buying interest. I certainly did not expect a 20% drop in the banking index, even with the news out of Britain. Unfortunately, the banking sector practically collapsed today with stocks like RBS, State Street, Citigroup and Bank of America acting like they were on the fast track to zero.
Without better action in financials, the market had no chance today. Breadth was horrible with only gold attracting any buyers and we did some technical damage as well by taking out the December lows on the senior indices. We couldn't even manage more than a minor, short-lived bounce in the final hour and ended up closing at the lows.
So far, 2009 marks the worst start ever for the market and it's a bit unsettling that the high hopes for the Obama presidency have not given this market any real boost at all. He is promising some real change and I think he means it, but this market isn't buying it. Obviously market players want to see some results and not just rhetoric. Until we actually see banks find a floor there will be no confidence among investors.
More than anything, we need confidence and certainty. That means some positive results and that is going to take time. Welcome to the presidency, Mr. Obama. You have your work cut out for you, but (hopefully) we are all rooting for you.
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