Yesterday, stocks crashed almost 240 pts before recovering all of it to close almost unchanged on the day.
The market had been spooked by the US Jan Initial Jobless Claims which came in above expectations of 623k. As long as 600k or more people file for jobless benefits, Non Farm Payrolls (i.e. Unemployment Report) has the potential to look really ugly.
The drastic pace of jobs losses is what gives the market heart attacks. And this market is living from one bypass to the next.
Then the market recovered all but 6 points to its starting point, bolstered by Obama's plan to spend USD 50 bn to stem foreclosures and modify mortgages - aimed at keeping people in their homes.
This is exactly the medicine the market needs - support the mortgage market and stop home prices from crashing further. As one can observe from the market reaction (huge stock selloff) after Trsy Sec Geithner gave his speech on Tue, the market does not have the patience for plans that take a long time to firm up and be implemented.
The market is for more direct solutions right now.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment