The markets over night

Imagine my surprise when I wake up in the early morning hours, unable to sleep, so after an hour or so, I get up and come down stairs, to see that the U.S. Fed had an emergency phone conference last night and decided to cut the overnight loaning rate by .75%.  This is a enormous cut, (that granted, many people were hoping for, almost expecting.) But to do it almost a week before expected.  Obviously it is an attempt to calm the markets.  And boy do they need calming!

While we slept the Hong Kong Hang Seng dropped 8.7%.  The Shanghai dropped 7.2%.  The Japan’s Nikkei tumbled 5.7%.  The Indian market closed down 5%.  All of this on top of Monday’s losses.  The Fed was smart to cut the interest rates early.  The question is, will it do the trick?  And if it doesn’t...well, I don’t even want to go there because if it doesn’t help...that’s a pretty scary scenario. 

It seems clear that the Dow will plummet at the open, as there are already a ton of future orders that have been placed yesterday and today (overseas) The question is, will it firm up like the Indian market did yesterday after dropping 10% at the open, to close only 5% down for the day.  (I can’t believe I just said only 5% down for the day.)

Well, the U.S. markets open in 30 minutes.  It promises to be a very interesting day.

Posted by Meg Tilly on Tuesday, January 22, 2008 in Chewing the Fat

Page 1 of 1 pages