Monday, November 10, 2008

By Aaron Smith, CNNMoney.com staff writer

Last Updated: November 8, 2008: 11:40 AM ET

NEW YORK (CNNMoney.com) -- The first week of November has been brutal for the job market, with nearly 15,000 announced job cuts from a slew of companies across multiple industries.

Eight companies announced job cuts this week as a means of cost-cutting during desperate times, representing industries as widespread as retail, finance, leisure, pharmaceutical and toy and automobile manufacturing.

On Friday, the Labor Department reported that the U.S. economy sloughed nearly 1.2 million jobs through October. Just in the month of October, the economy lost 240,000 jobs, raising the unemployment rate to 6.5%.

"We're losing jobs just about everywhere," said Robert Brusca, chief economist and Fact and Opinion Economics. "People are slowing their spending on everything. Now, even wealthier people are reluctant to spend money."

Circuit City, an electronics retailer based in Richmond, Va., kicked off the week by announcing on Monday that it was reducing its domestic workforce by 17%. The company would not comment on the number of employees that would be affected, but according to a recent 10K filing, Circuit City employs about 43,000 people in the U.S. That would mean roughly 7,300 positions are being lost, the biggest of the cuts in November so far.

On Tuesday, the Connecticut-based insurer Hartford Financial reported 500 cuts.

The following day, the British drug company GlaxoSmithKline said it would cut 1,000 sales positions.

Thursday was particularly gloomy, with four companies announcing cuts: 1,300 from Fidelity Investments of Boston, 1,000 from toy maker Mattel, based in El Segundo, Calif., 375 from Borgata Hotel Casino of Atlantic City, N.J., and 850 from La-Z-Boy, a furniture producer and retailer based in Monroe, Mich.

Ford Motor was the most recent to announce job cuts, with 2,600 cuts announced on Friday. The battered auto maker said it was trying to hold on to its dwindling cash reserves as it reported a $3 billion operating loss for the third quarter.

Most of the cuts are slated for the U.S., though Mattel said its job cuts will affect its global workforce.

"You have essentially every sector, every industry, furloughing workers, so it's going to get bad - considerably worse - before it gets better," said Richard Yamarone, director of economic research at Argus Research. "If the automotive sector falls, and it's on the ledge, then you could very easily have double-digit employment."

Lakshman Achuthan, managing director of the Economic Cycle Research Institute, said that Hartford and Fidelity are getting squeezed by the plunging value of the stock markets. But he said the other companies - and even the drugmaker GlaxoSmithKline - are getting stifled by a consumer lock-down on any type of spending that is not totally necessary.

"You don't have to buy a La-Z-Boy today, but you might have to go to the doctor, you have to eat, and you have to pay rent," said Achuthan. "[The companies] are seeing that the consumer has been stunned or is frozen and will not make any purchases that he will not absolutely have to make."

As for Glaxo, Achutan said that many Americans get their health insurance through their jobs, and when they lose their jobs, it affects the drugmakers. He said newly-uninsured people are spending their money on food and housing, instead of drugs.

Lawrence Mishel, president of the Economic Policy Institute, dismissed any notion that the job market would pick up in 2009, given the omnipresent nature of the layoffs, and the fact that they stem from a "credit freeze on top of a recession caused by a housing meltdown."

"The fact is that we're going to have very high unemployment for several years," said Mishel.

2) Commentary by David Zwebner, CEO of CommStock Trading 

U.S. Economy
The U.S. Labor Department said that the unemployment rate increased from 6.1% to 6.5% in October, the highest in fourteen years. Non-farm payrolls declined 240,000 in October, a bigger loss than was expected. The December S&P 500 closed up 31.70 at 936.20.

And the bad news wasn't just in October. The Labor Department also revised the count of September's non-farm payrolls from a loss of 159,000 to a loss of 284,000. So far in 2008, there has been a net loss of 1.18 million jobs.

The U.S. Commerce Department said that wholesale sales were down 1.5% in September while inventories were down .1%.

The National Association of Realtors said that the pending home sales index was down 4.6% in September, weaker than expected. From a year ago, the index was up 1.6%. January lumber was up .30 at $201.60.

General Motors said today that it lost $2.5 billion in the third quarter and warned that, if it doesn't get government help soon, it will likely run out of funds sometime next year.

Grains and Cotton
Here we go - the western half of the Dakotas got hit with its first blizzard of the season. Fortunately, the storm is said to be weakening as it moves eastward. Also, there is a line of rain from Mississippi to Michigan that is moving eastward.

According to the USDA's latest crop progress report, only 11% and 33% of the corn crops in North and South Dakota were harvested as of Sunday so there may be problems getting the crops in this year. December corn was down 2.5 cents at $3.755.

December cotton fell .91 to a new contract low of 42.07, hurt by the slowing outlook for global demand.

Orange juice
Hurricane Paloma could be a category two storm when it hits the Cayman Islands tonight and heads toward Cuba this weekend. So far, the storm is expected to stay east of Florida. March orange juice ended up 1.65 cents at 86.55.

Currencies
Statistics Canada said that the unemployment rate increased from 6.1% to 6.2% in October with a net gain of 9,500 jobs. So far in 2008, Canada has seen an increase of 203,000 jobs. The December Canadian dollar finished down a tick at 84.09.

The Bank of Korea reduced its interest rate from 4.25% to 4.00%, the third reduction in the past month.

David Zwebner, CEO
CommStock Trading Ltd.
Tel: +972-(0)2 624-4963
Fax: +972-(0)2 624-4876
www.ecommstock.com

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4) Closing Prices for Friday, November 7, 2008 

Amidex: Amidex35 (Class No Load Shares), $10.38; Index, 1387.57, Daily Change, 2.04%; “A” Shares NAV, $8.00.

Global Asset Management: Capital Appreciation, $189.32; Composite Absolute Return, $786.87; Diversity, $668.12; GAMCO, $640.14; Interest Trend, $157.73; Trading IV-US$ Class, $142.78; US$ Special Bond Fund, $300.62.

Invesco: Asian Equity Core, $2.81; Bond, $24.64; Emerging Markets Bond, $14.47; European Bond, EUR 4.3223;

Gilt, GBP 12.18; Global High Income, $8.79; Japanese Equity Core, $1.090; UK Equity, GBP 4.05. 

JPMorgan Fleming: JF Eastern Smaller Co., $54.29; JF Japan, JPY 10,559; JF Japan Equity, $9.48;

JF Japan OTC, JPY 701; JF Japan Smaller Companies, JPY 25,760; JF Japan Technology, JPY 28,777; JF Korea, $20.33;

Pacific Securities, $128.39; Pacific Smaller Companies $13.59; Global Bond & Currency, $20.45;

JF America, $32.23; JF Europe, $27.05; JF Germany, EUR 14.90; JF Global Equity, $26.95.

PCP: North America, $10.12; Europe, $13.46; Emerging Markets, $12.84; Balanced, $7.10; Aggressive, $5.83.                                                                                             

Platinum (updated once a month – September 2008 Prices): All Weather, $130.87; Equity Plus, $88.83;

Prot. Equity Plus, $79.13; Prot. Income Plus, $84.92; Cap. Prot. Income Plus A, $88.20.

Scottish Provident: Adventurous 1, GBP 2.171; Balanced 1, GBP 1.866; USD Adventurous 1, $.494;

USD Balanced 1, $1.656; USD Cautious 1, $1.714; For Preference: Baring GUF Eastern Europe, $64.06;

Fidelity Funds International, $22.450; Invesco Asian Equity Core, $2.770.

CommStock Trading Ltd
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Jerusalem 91077
Tel: +972-2-6244963
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