What a morning already!
The Dow is up 100 points since 10pm in the futures (as of 7:30 am), having fallen almost 100 points between Friday’s close and Sunday night as early Asian trading sold the markets off heavily. Gold is back at 1,055 now but oil is failing to hold $79, although we usually get the big push right before the US open to maximize the effect. Thank goodness actually as we took some new bullish positions last week (as noted in the weekly wrap-up) and it would have been very annoying to think we wasted our time trying to get more a little more bullish just when the market started falling apart (although we did maintain our 55% bearish stance over the weekend).
Bernanke spoke at the Fed’s Asia Economic Policy Conference, that the world financial crisis signals the need for global rebalancing. Though Mr. Bernanke didn’t specifically set out what rebalancing means, most interpret that to mean that debtor countries like the U.S. save more and that countries with surpluses like China spend more. It also could mean the dollar weakening at the expense of other rivals. Bernanke is due to make another speech on Asia and the financial crisis this morning at 11 am. Harvard’s Niall Ferguson says the dollar may fall another 20% in the next two to five years – the “simplest solution to most of America’s problems,” but terrible news for everyone who isn’t the U.S. or China.
England went market boosting crazy this morning with talk of the BOE extending their asset-purchase program to help revive the economy. That means the worse the British economy looks in upcoming data, the more chance of stimulus and the better for the markets so bad news will be good news for the bulls (not dissimilar from US market logic). Meanwhile, London home prices rose to record HIGHS as there is now a shortage of properties for sale. The average cost of a home in the capital rose 6.5 percent, the most since records began in 2002, to 416,157 pounds ($680,000), the owner of the U.K.’s biggest residential property Web site said today in a statement. Prices climbed 2.8 percent across Britain as transaction levels dropped by half from 2007. So, no one is buying any homes but, if they do – they cost a lot!
China chipped in with global cheerleading this morning, forecasting a sharp rise in Q3 GDP to 9% from the Chinese Academy for Social Sciences, helping lift economic expansion for the full year to a projected 8.3%,…