Friday, January 11, 2008
Bernake to the Rescue!
Fed Chairman Bernake rode to the rescue Thursday by saying there will be further rate cuts. The Dow gained 117.78 points to close at 12,853.09. The SPX added 11.20 points closing at 1,420.33. We are in the green and looking good.
The major market indices showed a lot of volatility Thursday and varying economic and corporate news. Reports on jobless claims, which fell by 15,000; and wholesale trade, which showed a 2.2 percent rise in wholesale sales; helped provide support for stocks. However, a meager gain in same-store sales during December kept buying to a minimum.
What really helped the markets Thursday was a speech by Fed Chairman Bernanke. The Fed chief stated that recent data on the economy has showed weakness and that the Fed is ready to take substantive action if necessary. The Fed is concerned about less available credit because of problems in the subprime market. This, along with falling home prices and rising commodity prices could slow consumer spending. As a result of these comments, Fed fund future showed a spike in the odds of a 50-basis point cut at the January 29th meeting.
As I type today Friday I see that Merril Lynch is writing down yet more losses in the billions. The markets are not liking this and the futures are pointing to a day of possible carnage.
Until next time.
The major market indices showed a lot of volatility Thursday and varying economic and corporate news. Reports on jobless claims, which fell by 15,000; and wholesale trade, which showed a 2.2 percent rise in wholesale sales; helped provide support for stocks. However, a meager gain in same-store sales during December kept buying to a minimum.
What really helped the markets Thursday was a speech by Fed Chairman Bernanke. The Fed chief stated that recent data on the economy has showed weakness and that the Fed is ready to take substantive action if necessary. The Fed is concerned about less available credit because of problems in the subprime market. This, along with falling home prices and rising commodity prices could slow consumer spending. As a result of these comments, Fed fund future showed a spike in the odds of a 50-basis point cut at the January 29th meeting.
As I type today Friday I see that Merril Lynch is writing down yet more losses in the billions. The markets are not liking this and the futures are pointing to a day of possible carnage.
Until next time.
# posted by Paul @ 6:11 AM 
