After a trading day that saw the largest point swing in market history, Stocks are now trying to stabilize. Yesterday, the Dow closed down 370 points on the day, but that was almost 500 points better than the worst levels of the day. As global credit markets continue to improperly function, both Stocks and Bonds are not a place for the faint of heart.
The Fed and Treasury Department just announced they are developing a plan to purchase short-term commercial paper that many companies rely on to finance their day-to-day operations. This plan would make the Fed a credit source for commercial banks, investment firms and non-financial businesses as well. Stocks like the news as this plan will help many businesses with their short-term credit and funding needs - thus helping lift some uncertainty and restoring confidence.
Australia lowered their benchmark rate by 1 full point this morning, and rumors are now swirling that the Fed may make an emergency 50bp rate cut to the Fed Funds Rate, prior to their scheduled meeting on October 29th.
