Oct 5.
While US stocks finally rebounded into yesterday’s close with SP500 up over 2%, metals continue to trade under pressure. Copper, silver and gold are all threatening new lows, and crude made a new low yesterday. Additionally, the Hang Seng index continues to plummet, down over 1/3rd from April and -3.4% this morning. US stocks were apparently underpinned by Bernanke saying the Fed could do more, and by a late plan to support Dexia, leading to thoughts that europe’s banking system as a whole could be righted.
–Moody’s cut Italy’s rating…didn’t seem to have much of an impact.
–Red/gold pack spread fell another 5 bps to 164.5, revisiting the low made on the FOMC statement day. The intervening high was nearly 195. 2/10 treasury spread edged up a bp to 155. The Fed’s first sales of treasuries related to twist ops occur tomorrow, but only $8-9 billion of paper with less than one year to maturity.
–Today’s news includes ADP and non-mfg ISM expected 52.9 from 53.3.
–Chicago’s mayor Rahm Emanuel telling city employees to pay $3 million in unpaid traffic violations or lose their jobs. I’m sure that amount is being carried on the books at par, as if that $3 million is going to be paid…more likely it’s worth about $1 million. The new austerity budget is coming to Chicago….
