Thursday, October 09, 2008

What Is It About My Birthday?

Today is my birthday. I was hoping to sleep in for once, but not in this market! At least the futures were nicely higher when my alarm went off at 5:30am. Small comfort.

Maybe if the market gods are in a forgiving mood, today will mark the start of a new rally. On this day (October 9) in 2002, the bear market bottomed, and we went on to enjoy a 5-yr bull market. Coincidentally, it was also on October 9th last year that the bull market peaked. I don't know what it is about my birthday.

Today is also Yom Kippur, so I hope all of those credit derivative swap (CDS) sellers are atoning for their participation in pushing some of America's largest financial institutions into market lore.

The ban on short-selling was lifted last night, so there is some concern in the financial stocks that short sellers could reload. But so far today the action looks mixed.

Credit market angst is higher again today, despite all the moves by global central banks. The TED spread is up by 1.8%, and 3-month LIBOR is at its highest levels of the year at 4.75%. Amazing.

Last night, three Asian central banks joined the rate cut effort and cut key interest rates. S. Korea, Hong Kong, and Taiwan all participated. The Asian stock markets finished mixed nonetheless, as concerns about an economic slowing outweighed the delayed benefits that come from interest rate cuts.

IBM preannounced better-than-expected Q3 earnings last night, which was a nice surprise. The Wall St. Journal is reporting that MetLife (MET) and Hartford Financial (HIG) held merger talks. They also said that National City (NCC) is in talks with a group of banks regarding a possible sale.

The 10-year yield is higher at 3.76%, which to me is a positive sign for the economy longer-term. If recession fears were really high, I would expect the yield to be falling. The VIX is down -5.58% right now, but still incredibly high at 54.32.

The AAII investor survey showed 61% bears this morning. Not surprisingly, this is the third highest level on record for the survey.


At 6:59 PM, Blogger OT said...

What will happen with the $63 trillion CDS market? Every bounce has been met with fierce selling. Is that at the core of the problem and I don't hear anything about it.

At 7:35 PM, Blogger Debbie said...

happy birthday!!!

Dow 7,000 within the next two months?



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