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FTSE 100 may open higher on Friday

by Paul
FTSE 100

Spread betting quotes point to the FTSE 100 opening 185 points higher at 5,422 after giving up 639 points yesterday

London is set to attempt a rally, leaving it out of step with Asian markets this morning, which are once again retreating rapidly.

Spread betting quotes point to the FTSE 100 opening 185 points higher at 5,422 after giving up 639 points yesterday.

As if this week couldn’t get any stranger, today is a real Black Friday, Friday the 13th. Friday the 13th is also a rather infamous series of slasher movies, with the main protagonist, Jason Voorhees, resurrected in a series of sequels to wreak havoc on the local teen population on various Friday the 13ths. From a financial markets point of view, Jason hasn’t bothered waiting for Friday this time, slashing his way through equity, energy, currencies and now bond markets throughout the week. He has left a trail of destruction in his wake far higher than the body count in any of his starring roles, said Jeffrey Halley at Oanda.

The Federal Reserve did its best last night, announcing a three-day $1.5 trillion blitz of liquidity to the markets via the repo market. That only caused a temporary pause in the markets sell-off, which resumed shortly thereafter. The limitations of monetary policy are being laid bare by the financial markets when used in isolation, he said.

Most worryingly, US bond yields rose last night, when really, the situation was ripe for a mass stampede to the US Treasury market driving down yields. That suggests two things. One, credit is tightening, a gruesome scenario for business. Two, investors are now moving to the ultimate haven, hoarding cash in boxes under the bed, Halley added.

US equity markets suffered their worst day since 1987, with the main benchmarks all hitting their 10% circuit breakers at one stage.

The Dow Jones closed 2,353 points lower at 21,201 and the S&P 261 points lighter at 2,481.

In Asia, Japan’s Nikkei 225 is off 987 points at 17,573 and Hong Kong’s Hang Seng is down 630 points at 23,679 this morning.

The markets may be in freefall but corporate news still has to happen but there does not seem to be much of it scheduled; London had more than its fair share of companies warning yesterday that they could go bust and any unscheduled corporate announcements today are likely to be because of a dire need to inform shareholders of bad news.

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