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Monday, July 20, 2009

Morning Market Report

After a monster week, the markets look up slightly again this morning again at the pre open. The futures are all trading somewhere around a half percent higher at the open. After striking out with the government, CIT is near an agreement with its creditors to renegotiate its debt and avoid bankruptcy. The deal would be worth about $3 billion according to sources close to the negotiations. CIT has about a billion worth of debt coming due in about a month and was facing the risk of bankruptcy if a deal wasn't struck.

Asian markets were all over the place. The Hang Seng in China was up 3.7%, the NIKKEI in Japan was even, while the Straits Time Index in Singapore was %up 1.04%. Meanwhile, European markets all posted solid gains. The FTSE in London was up 1.37%, the DAX in German was up 1.38%, while the Spainish Index was up .77%.

Bonds continue to move their rates up. The Ten year U.S. Treasury will likely push 3.7% today. It's currently trading at a rate of just over 3.68%. Most bond rates were up 2-3 basis point (2-3 hundredths of a percent) on the world markets.

Crude oil continues its push up after recently touching below $60 a barrel. It is now just over $64 a barrel. The U.S. dollar is mostly lower. It's down .85% against the Euro, 1.09% against the British pound, and .75% against the Canadian dollar, but is up .3% against the Yen.

My analysis:

If world markets are any indicator, the equity market in the states should have a good day. Most of the momentum is behind their back. Earnings have generally been better than expected. CIT has all but secured financing to avoid bankruptcy and last week the major indices were up.

The earnings season may have been a benefactor of dire expectations. The earnings weren't generally so much good as they were much better than expected. This has caused markets to jump. Of course, better than expected earnings this quarter mean bigger expectations for quarter three. Markets are all about expectations and this past earnings were better than expected.


Please note, I am not an investment professional, though I have spent more than a decade working in the financial world. None of this analysis is meant as investment advice. All investment decisions should be made in lieu of each person's personal financial situation. Nothing written here should be misconstrued as investment advice.

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