Daily Futures Commentary FINANCIALS 022409

Tuesday, February 24, 2009

OVERVIEW

The markets are still jittery about the notion of the U.S. buying a 40% stake in Citigroup. Yesterday traders in the U.S. sold off equities on the rumor that the government would buy an interest in Citigroup despite overnight strength. Many traders fear that nationalization of a major bank will be a bad idea as it will flood the market with too much money to complete the deals and open the door to more deals in the future. Traders also feel the government has no experience in running a bank the size of Citigroup.

Rumors are out overnight that AIG is running out of money and may ask for additional funds. Equities have not reacted negatively to the rumor, however, U.S. Treasury Bonds are rising. Both the U.S. Dollar and gold markets seem to be ok with the idea as they are trading mostly lower.

President Obama will make his first address to a joint meeting of Congress. The market will be especially sensitive to his comments. Look for him to be a little more upbeat in his comments as his …
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