Market Anxious Over Bernanke/Paulson Meeting
The market had a nice rally into the close yesterday to offset the earlier weakness. The SPX looks to be consolidating a bit below its overhead 200-day. I would still like to see a follow-thru accumulation day this week. Absent that, there could be more selling pressure.
This morning, there will be a meeting between Fed Chairman Bernanke, Treasury Sec. Paulson, and Senator Dodd. I'm not sure what it means, but hopefully they will come up with some good ideas to improve the current credit crunch. The Fed, for its part, injected more reserves into the system this morning.
Bond yields are lowere again, with the 10-year down to 4.58%. And the T-bill has plunged all the way to 2.93%, anticipating a near-term cut in the fed funds rate. Oil is steady around $71.20.
China said it will raise lending rates further as it takes steps to prevent an asset bubble. The meteoric rise in their markets makes investing there a risky proposition. Market history tells us that when markets have that much strength in such a short period, it usually does not end in a pretty fashion. As always, timing is the key.
Asain markets were mostly higher overnight, except for India which declined.