einfach nur genial - Bernankes substantial correction is underway in the housing market als auslöser für ein kursfeuerwerk. also auf zu neuen höhen - die zinssenkung steht vor der tür, auch wenn morgen die EZB erstmal die zinsen erhöht
Rate Cut Speculation Lifts DJIA Futures To All-Time High
10/04/2006
Dow Jones News Services
(Copyright © 2006 Dow Jones & Company, Inc.)
CHICAGO (Dow Jones)--Taking comfort from the words of the nation's top central banker, traders on Wednesday sent futures on the Dow Jones Industrial Average to the highest level ever for a front-month contract.
Futures on the Standard & Poor's 500 index climbed to a multi-year high as well.
Federal Reserve Chairman Ben Bernanke, speaking in Washington, said a "substantial correction" is underway in the housing market. Bernanke's toughest language yet in describing the housing slowdown bolstered speculation that the Fed will begin to lower interest rates, perhaps this year, but more likely in 2007.
In fact, futures markets are pricing in a 4.5% federal funds rate at the end of 2007, three-quarters of a percentage point below the current 5.25%.
"Traders are centering on the possibility of easier credit next year and are ignoring the negatives of potentially slower growth in the economy," said Alan Bush, a futures analyst and vice president for AG Edwards.
The December DJIA contract at the Chicago Board of Trade soared to a high of 11915 Wednesday afternoon, topping the previous high of 11853 established in January 2000.
At the Chicago Mercantile Exchange, futures on other stock indexes surged as well, with December S&P's posting a contract high of 1359.00, marking the highest level for a front-month S&P contract since February 2001.
Helping fuel the rally, floor sources reported stop-loss buying above the September high of 1350.70 and the previous contract high of 1353.80, set on May 5.
Stop-loss buying takes place when traders who are short the market - those expecting prices would move lower - buy futures to cut their losses.
S&P's are the most actively traded among stock index futures. Just before Wednesday's close, volume for the electronically-traded December E-mini S&P 500 had reached nearly 1.3 million contracts, considered very heavy, according to market sources.
E-mini S&P contracts are one-fifth the value of regular-size S&P contracts. E-mini's are aimed at attracting retail traders or smaller-scale investors.