Last Friday nightmare hit the market with the Dow Jones plummeting 91 points, the S&P 500 sliding 1.2%, which translated in the worst week for stocks in over three months.
Be cautious, because next week might not be much better! In order to counter the commodity inflation and the real estate market bubble, China is expected to boost interest rates….which mainly contributed in the Friday market downfall. If the market falls another 3%, we might be braking the support level, this means hungry bears market just ahead.
Next week will offer at least one major event, on Wednesday Nov 17, General motors will be scheduled to price it’s IPO(initial public offering) of 385 millions shares between 26-29$ each.
Getting shares on this deal for ordinary investors is very difficult, nearly impossible, to my opinion if you cannot get in before the aftermarket, then let it pass, as stock could start as high 35-38$.
Let’s not forget the October auto sales in the Us went up 13.4%, which indicates a strong finish to the year.
What about Ford (F) !
If you have invested in shares of Ford, you are in an excellent position, as Next week, most annalists and money managers will be comparing GM and its primary competitor Ford.
Ford has come a long way, sailing upwards, with an incredible turn around headed by CEO Alan Mulally, while GM tarnished reputation is barely getting its act together with a new CEO, although it is improving,
Consider that Ford has taken market shares, beaten GM 2 years in a roll, and estimates to continue to go forward.
Ford is presently behind GM in market shares for emerging markets,
The bankruptcy has help GM balance sheet with 5.4 billion in dept, and no big maturities until 2015, while Ford has 21 billion dollars in dept …oups!
However, Ford is maintaining a rigorous balance sheet and is heading towards a net cash positive maybe much faster than analysts may be predicting.
Ford is also doing a great job of controlling its cost, and it’s in a much better position with regards to underfunded pensions, which are 12 billion in liabilities versus 23 billion for GM.
Some people think Ford is the better company and might get a boost stock from next week GM initial public offering.
So maybe it’s time to consider getting shares of Ford before next Wednesday!