The article “Four on Four: Decoupling from Dow” by Joanna Osinger of Market beat analyses the trend last week and of Monday. It reports that Investors were little cautious on Monday after the major sell off that the market witnessed on Friday, but the gains eventually took off. Dow gained around 287 points on Monday. The S&P 500 added around 35 points on Monday. The one index that seemed to have lagged behind is that of Nasdaq as it was able to do only 36 out of the 65 points.
The two things that bother the economy are that of Labour and that of ‘corporate defaulters’. The article says that as far as the hiring continues, it might be good for the economy, but as caroline of Bloomeberg (as cited in the article) says that demand for goods and hiring are related, and obviously hiring would increase only if there is demand. I agree by that completely.
The article goes on to say that investors are fast loosing confidence in corporates as the number of defaulters are increasing and Moody’s reasearch only points that the percentage of defaulters have grown from 1.5% to 3.5% in July 2008 and anything above it is really bad. Well only a good policy in place can aid them.