SubscribeDaily Futures Commentary May 7, 2009
Thursday, May 7, 2009
Equity markets are surging overnight as traders are optimistic that the release of today’s bank stress results will yield no major surprises. Rumors have been flooding the market for the last 10 days speculating on how many banks are safe and how many will need capital. The stock market, however, never retreated on any of the negative stories. When the results are released after the close, traders are going to have to decide whether the Fed is telling the truth about the condition of the banks. So what started out as a potential disaster for the banking system because it opened up the possibility of wild speculation has actually turned out to be almost a non-event.
The Treasuries are the markets to watch because interest rates are the true indicator of the condition of the economy. Both the Treasury Bonds and Treasury Notes have been telling investors since March 18 that the Fed has matters in control. This has been reflected in the steady decline since that date. When the Fed unleashed its plan to use $1.2 trillion to buy-back assets, it told investors that it was serious about …
Read More …
Loading ...
