(September 1 – 09:00 EST) – Markets look set to bounce back today. Asia and Europe are rebounding. The S&P futures have been pointing decidedly up all morning too. That said, there appears to be no compelling reason for the recovery, apart from the feeling that markets are oversold.
Today’s upward momentum may be little more than the proverbial dead-cat bounce, there’s no committed bullishness in the market. Traders can’t find anything more compelling than the next meeting of the U.S. Federal Reserve Board. And that’s more than a month away. It will be hard to generate any buying entering the typically-rocky fall season, particularly ahead of Y2K.
Nevertheless, European traders have been acting in sympathy with the Asian rally. London’s FTSE 100 s up about 17 points so far. In Paris the CAC 40 is up 24 points. The
German DAX has added 28 points too. There is some actual bullish sentiment
in Germany though, as its number one and number three utilities, Veba AG and
Viag AG, have agreed on a merger structure.
Overnight in Asia, markets rallied strongly, driven mostly by bargain-hunting
traders. There are no obvious changes to fundamental conditions. But Japan’s
Nikkei managed to trade up more than 2% after yesterday’s 3% drop. It closed
up 366 points. Hong Kong’s Hang Seng index closed up 61 points on the
strength in Japan.
In the U.S., the tax preparation firm, H&R Block Inc., has announced an
US$850 million cash bid for Olde Financial Corp. The bid is partly an
attempt to get into the discount brokerage business by H&R Block as Olde
also owns the U.S.’s fourth-biggest discount broker, Olde Discount Corp.
It was revealed today that another prospective merger never got off the
Ground. Chase is reported to have approached venerable Wall Street
institution Morgan Stanley Dean Witter, but MSDW resisted a deal on the
basis that it wouldn’t be a cultural fit.