US market rallies as traders embrace government moves
While the initial feedback from the markets after the last ditch rescue of AIG was less than generous towards the government, there has been a sea change today which has seen the US markets rally like nothing seen for the last 6 years. Is this a turning point or will it offer sellers the chance to bail out?
There is no doubting that the US authorities mean business with the announcement of a joint rescue operation around the world which saw $180 billion injected into the financial system. This is a massive amount of money and it appears that there is actually more where that came from. We have seen the likes of the Bank of England and ECB join the party together with the Fed to bring liquidity to the money markets and keep the wheels of business oiled. The hope is that a concerted effort by these big name players in world finance will help to inject some well over due confidence back in to the market and give traders a kick start.
The next few days will be critical but there is genuine optimism that while markets will not suddenly bounce back to levels seen before the credit crunch, we have possibly seen the bottom of this particular economic cycle.
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