Equities shot out of the starting gate today on both sides of the Atlantic. In the UK, it was Lloyd’s turn to join the party after a bullish note from Citi Group whet investors’ appetite for the new banking giant. With a fundamental valuation of financial shares being difficult to say the least, confidence has been the currency of choice ever since the credit crisis broke. Today, confidence is working for the banks as the idea of nationalisation is shoved to the sidelines for now.
US markets launched higher from the open in large part due to the bad bank plan announced by the Obama Government. Such a opening large gap higher is unheard of on a Fed day, normally rate decision days are tight affairs before the announcement. No-one expects the Fed to cut rates this afternoon, but the policy statement will certainly be a market mover and if the markets like what they hear, we could push even higher off the 2008 lows.
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