GE’s (GE) numbers were OK. There was no real difference between expectations and what really happened. GE hit a 52-week low yesterday, so the company’s world does not look so good to Wall St. At $32.92 the stock is down from a multi-year high of $42.15 hit last Fall.
GE has the second largest market cap of any company in the US. At $325 billion, only Exxon (XOM) is ahead of it. Exxon’s rise could be attributed to the run-up in oil prices.
GE is as close as any company to being the global economy under one corporate roof. Its businesses range from infrastructure to medical to finance to entertainment to industrial products.
GE is a proxy for all that goes on in the business world from Zanzibar to India to the US.
The fact that GE’s stock is so low is a bad sign for the global economy, It is a measure of the pessimism Wall St. has not just about the US GDP but the GDP of the wider world.
There was nothing terribly bad about the GE numbers. The healthcare unit did poorly. So did NBC Universal. Infrastructure did well. Commercial finance did not.
But, the market invests based on tomorrow. Tomorrow is the rest of 2008. Wall St.’s GE vote says that there are not going to be any big pockets of strength overseas to rescue multinationals. The world economy will fall apart one piece after the next.
GE is the entire business world in one place and that place has lost its luster.
Douglas A. McIntyre
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