Pre market futures have been a roller coaster ride with crude oil hitting a new high, inflation in Europe hits an all time high of 4.0% in June, and LIBOR rates rose by a significant amount overnight
June 30 (Bloomberg) — The cost of borrowing overnight in dollars rose by the most since at least 2001 as banks sought funding over the end of the first half to replenish their balance sheets.
The London interbank offered rate, or Libor, surged 111 basis points to 3.61 percent, from 2.50 percent on June 27, the British Bankers’ Association said today. The gain was the biggest since at least Jan. 31, 2001, when Bloomberg began compiling the data. The rate was at 2.07 percent on June 20, the lowest level since December 2004.
The record inflation data for the European nations raises the prospects that the European Central Bank will be put into a situation of having to raise key interest rates which would put further downward pressure on the US dollar. And now the rising LIBOR rates add to an already difficult situation of mortgage rates in the United States as forces that make up the prime rates in the US are rising. And rising mortgage rates in the United States only worsens the housing market.
Is everybody in agreement with where the US markets are headed? Absolutely not. Two major banks in France both issued their current views and they could not be any further apart from one another…
Société Générale analyst Albert Edwards forecasts the Dow Industrials dropping to 4,500 by the time everything is done. And BNP Paribas says the worst is over. Sorry BNP, we don’t share your optimism that the situation is improving.
We still see more, and perhaps larger, losses within the financial sector as the credit implosion has shut down the nations flow of money.
The volatile swings in the S&P futures have us not knowing the direction of the market upon the opening bell, we have to wait and see how the sentiment settles in the first hour to attempt to gauge the mood of the market. At the moment it would seem that even the market does not know where it is going today, yet.
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- Is The United States Worthy of a AAA Sovereign Rating?
- Crude Oil Market Summary 7/19/2010 to 07/23/2010
- Economic Data and Earnings Schedule for July 23, 2010
{ 2 comments }
DOW dropping to 4500 , wonder where did he pull that figure from his body >> ?
Yeah….4500??? Anyone can make numbers up.
The worst is over???? Probably not.
The answer probably lies somewhere between what the two French banks think.