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Overnight Stock Index Futures Up Sharply Early Sunday Evening.

Several times last week, overnight Dow Jones stock index futures were up 100-200 points, only to collapse the next day, when the US markets actually opened, finishing down substantially.

Tonight, Sunday evening, stock index futures are up sharply (all prices are from 6:00-6:49pm ET):

S&P 500 Index (SPZ8) 917.40 +26.40

Nasdaq 100 (NDZ8) 1314.25 +31.75

Dow Industrials (E) (ZDZ8) 8592 +222

E-Mini S&P Midcap (EWZ8) 558.30 +12.60

Russell 2000 (TOZ8) 530.70 +9.60

A chart version is here.

At 7:19pm ET, Australia's main index is up 5%, while the New Zealand market is up only slightly.

The move up may reflect happiness with the European financial plan announced earlier today.

JFred (mail):
MSM to the contrary, the stock markets are not the thing to look at. This is not fundamentally a stock market crisis. This is a banking crisis. The best thing I know of to look at for an inter-bank crisis of this sort is the "Ted Spread". You can see the Bloomberg version of this here. I like the 1D button and the 5Y button above the chart.

The Ted Spread is a sort of fear factor for the bankers. Think of it as the bankers blood pressure; up is bad. You can get more info on Wikipedia.
10.12.2008 8:53pm
Mac (mail):
Just want to let everyone know that my spouse wants to go back into the stock market. Said spouse is always wrong. Wants to sell at the lows and buy at the highs.

Ditto with interest dividend investments. I suggest you run for cover.

JFred, I understand that this is not a stock market crisis but a banking crisis, but can the stock market do well during a banking crisis?
10.12.2008 10:15pm
gaypastor (mail):
What we DON'T need is Pelosi's stimulus package which will give "billions of dollars into infrastructure projects and budget relief for cash-strapped state and local governments." What we need is another tax rebate!!! Why should Wall Street and the government agencies get all the big hand outs? C'mon Dems....even Bush was smart enough to give some CASH directly back to the American people. Maybe the presidential candidates will stop spending HUNDREDS OF MILLIONS for ads and start giving some of it back to the people...just goes to show ya...were dealing with Twittle Dum and Twittle Dee here! Take people's money for donations...than the economy goes bad...but keep the money so you can create a half-hour Obama show or a McCain anger-filled rally so many Americans will be poor no matter who wins. I miss Hillary!
10.12.2008 10:34pm
SenatorX (mail):
We saw some signs last week of the market trying to recover. It kept selling off at the end of each day though. The giant sell orders at the end of the day (mutual funds?) didn't help. The initial G7 statement Friday was weak but as the weekend progressed I think investors around the world started to hear more of what they wanted. I few pieces of the puzzle are still missing maybe but I would guess a combination of the direct re-capitalization plus perhaps more importantly the EU coming together to back interbank lending (for 5 years). Really this last thing which came out today was probably the thing that turned the tide.

Add in Fannie and Freddie being ordered to buy 40b in mortgages every month. Oh and even some account rules "clarification" saying something along the lines of banks get to do their best when marking to model.

I went to bed Friday thinking I was seeing the death knell of the EU. Surprisingly they managed to get it together.
10.12.2008 10:52pm
Theodore M. DeBettencourt (mail):
Lehman's CDS auction went rather well. This is what the market is probably reflecting. Theoretically the world could have ended at that auction but it didn't the pieces were cut up and on the 20th they will be handed out. The market is still going to go down drastically over the long run. It is nice to see positive signs for tomorrow though. I made a $10 bet that we'd see the Dow at 6k in 45 days time. Would anyone take that bet with me?

I could then package all these bets together and sell them to other parties. I will start issuing insurance on this bet only I won't call it insurance. I won't bother keeping enough money on me in case I am incorrect. If my bet is wrong I'll call up Paulson and ask him to buy my "bad asset" either directly or by buying preferred shares (while diluting the hell out of everyone else) in Theodore Enterprises. Win or lose I'll profit.
10.13.2008 12:33am
Harry Eagar (mail):
Most amusing.

The 'Adam Smith' who wrote popular market books back in the '70s beat you to it, sort of, with his suggestion that a physician with an income of $100K/yr could incorporate, go to market and expect to be capitalized at 20X earnings and get $2M.

I don't think he was kiddin'.
10.13.2008 2:37am