Wall Street's white Knuckle ride - BetOnMarkets.com
Wall Street barreled higher this week,
giving the Dow Jones industrial average its biggest two-day point gain
in five years, after a Federal Reserve official hinted that the central
bank may lower interest rates again says BetOnMarkets.com's Michael Wright.
Investors' renewed hopes for a rate
cut added to their relief that companies that made losing bets on sub-prime
mortgages, such as Citigroup Inc. and Freddie Mac, are coming up with ways
to raise cash. The market was clearly optimistic that at least some of
the damage from the credit crisis was finally being mitigated.
However, Wall Street has been fickle
in recent months, with the Dow often rising and falling by triple digits,
and no one is betting that the mortgage crisis that tripped up the nation's
financial industry this year, is over, or that the market's huge gains
so far this week will stick. Despite its spectacular advance, the Dow remains
more than 6 percent below its Oct. 9 record, close to over 14,000, having
plunged due to worries that the housing market's slump will lead to further
losses for banks, and that the Fed can't keep slashing rates
The possibility for lower rates seemed
more compelling to investors than persistent concerns about a slowdown
in economic growth. The Fed has already reduced rates at its last two meetings,
and continues to inject billions of dollars into the financial system through
repurchase agreements, to help calm the shaky markets. The central bank
will hold its final rate-setting meeting of the year on December 11th.
Plunging oil and gold prices also
lifted investors' hopes for a rate cut, if inflation is in control policy
makers have less reason to keep rates high. The Fed's Beige Book of economic
activity around the country, said with the economy expanding at a reduced
pace, most core prices are stable or down slightly.
The news of the last few days points
to the possibility that the volatility with which the market has been plagued
during the last few weeks, is here to stay at least for the rest of the year.
The average trader is able to take
advantage of this increase in volatility in the equities market, by buying
an 'up or down' option from BetOnMarkets.com
This option compensates the trader
if the index touches either the higher or lower trigger, within the predetermined
time frame. Buying a 20 day term 'up or down' option on the S&P500,
with 60 points on each side, returns a possible 7% ROI.
- THE END -
Contact Details:
Name: Mike Wright Tel: 448003762737
Email: editor@my.regentmarkets.com Url: Betonmarkets.com & Betonmarkets.co.uk
Address: Regent Markets (IOM) Limited
3rd Floor, 1-5 Church Street Douglas, Isle of Man IM1 2AG
Regent Markets is the world's leading
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Article Source:
Amazines.Com
