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Current Futures: Dow -16.00, S&P -1.90, NASDAQ -2.75
Asian equity markets are trading deep into the green territory, following the positive close from Wall Street. However, U.S. futures continued to trade below the break-even line.
The global markets pulled higher off of positive news reports coming from the financial sector. First, the news that the Libor rate fell to the lowest rate on record sent the financial sector higher. TheLFB-Forex.com Trade Team notes that the Libor rate fell to 79 basis points for a 3-month loan, suggesting that the action pledged by the world’s biggest central banks are actually starting to work.
Quickly following the Libor announcement, Bank of America received a buy recommendation from Goldman Sachs, even though the bank still has to raise huge amounts of cash following the stress-test results.
However, the news that really moved the market and will pull it higher over the upcoming period is that Goldman Sachs, JP Morgan, and Morgan Stanley applied to repay the TARP funds. The three banks would have to pay back a total of $45 billion, but as TheLFB-Forex.com Trade Team notes, the Treasury would have first to agree for this to happen. This move may provide a strong needed grip on the financial sector over the next few weeks, as it shows things are really starting to improve. At the end of the day, Goldman added 6.51%, Morgan Stanley was up 8.23%, while JP Morgan gained 6.73%. Similar gains were observed tonight, among the banks listed in the Nikkei 225.
Overnight, the Japanese Nikkei rose 277.37 points (3.07%) to 9,316.06. The Australian S&P/Asx gained 81.80 points (2.19%) to 3,817.40.
Crude oil for June delivery was recently trading at $59.10 per barrel, higher by $0.20.
Gold for June delivery was recently trading lower by $0.90 to $920.80.
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