Friday, October 03, 2008

All Eyes Are On The House

The market is bouncing this morning amid optimism that the House will get it right this time and vote in favor of the $700 billion asset purchase plan (does this thing have a real name yet?)

The bounce came despite a weak jobs number this morning. Nonfarm payrolls fell -159,000 in September, the 9th consecutive month of declines. This figure was above consensus for -105,000, but last month's figures were revised higher to reflect declines of -73,000.

Credit market angst is still high this morning, as 3-month Libor has climbed to 4.33%. The fed funds futures in this country are pricing in a 98% probability that the Fed will cut rates 50 bps to 1.5% at its next meeting.

In a strange turn of events, Wachovia (WB) said it was being bought by Wells Fargo (WFC) for $7 per share. This comes despite the FDIC already backing a purchase by Citi (C), so there looks to be some legal haggling there.

Asian markets were lower across the board overnight on concerns about a recession here in the U.S. The dollar is up again, as is the 10-year yield, to 3.68%. Oil is up just a touch, near $94. And the VIX is -5.7% lower to 42.73, which is still a VERY high level, signaling continued angst in the stock market and above-average levels of volatility.

I don't think that the House will put the bill to a vote unless they are sure they have the votes. Let's just hope there are no surprises.


At 11:45 AM, Blogger Apple Oracle said...

I think even with the bailout, we are going to be in a deep recession - so it will be a while before home values and stock values recover to what they are today.


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