Can we call this a turning point in the street?

Tuesday, March 18th, 2008

The Fed cut its discount rate by 75 basis points, even when the street predicted a 100% chance of a full 100 point cut.

Whats more important though is that Goldman Sachs (GS: chart, web, Y!) and Lehman Brothers (LEH: chart, web, Y!) both reported smaller than expected profit declines, easing fears that the liquidity crisis that sank Bear Stearns (BSC: chart, web, Y!) could spread to other investment banks. While normally I don’t view a “smaller than expected decline” report as overly bullish, I do believe it helps isolate the …

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What a weekend!

Sunday, March 16th, 2008

It has become clearly evident that the Fed works weekends.

Last night the Fed announced an emergency quarter point discount rate cut to 3.25%, and on top of that, offered to lend money to a longer list of firms than ever before.

The rare weekend move came as J.P. Morgan Chase (JPM: chart, web, Y!) sealed a deal to buy Bear Stearns (BSC: chart, web, Y!) for just $2 a share backed by up to $30 billion borrowed from the Fed. The Fed board gave its approval to that unique funding arrangement, which guarantees JP Morgan against …

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Next Week on the Street

Sunday, March 16th, 2008

A few events to remember for next week:

Goldman Sachs reports earnings - March 18th, 8:30am
Goldman Sachs finished out 2007 in good shape with shares exceeding analysts predictions. However, Goldman’s true isolation from mortgage backed securities will be revealed in earnings for the next several quarters. With the bail out of Bear Stearns, I’m sure the street will be on pins and needles to see how well Goldman is fairing in this volatile market place.

Federal Open Market Committee meeting - March 18th, 9:00am .
Traders in interest rate futures have a 3/4% cut in the fed funds rate in mind and increasing evidence that the U.S. economy may be …

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Posted in Banking, Credit, Economics, Finance, Market Trends | No Comments »