After a day loaded with Fed moves and the market responding every which way, the Dow ended the session with its sixth straight loss, down 2%.  How will the markets react to today?

Credit Crisis Update:
The difference between swap rates (corporate debt premiums) of different maturities compared to Treasury yields are down .This action can be attributed to the coordinated central bank rate cuts. Narrower swap spreads can push borrowing costs lower, lowering the cost of debt for corporations.
Now if we can only get the banks to start lending…

 
Market Outlook:
Overnight, European markets recovered, with British banking stocks rallying in response to the government’s 500 billion pound rescue plan. In the U.S. the Bush administration is considering taking ownership stakes in certain U.S. banks as an option for dealing with a severe global credit crisis. The Treasury Department would use money from the rescue package to inject capital into financial institutions and take shareholder positions in return. U.S. futures point to a higher open, with the Down up almost1.5% and the S&P is up almost 2%.

In an unexpected turn of events, corporate earnings might come in better than expected. IBM posted third-quarter results that beat forecasts and reaffirmed its full-year earnings guidance.

Economic Calendar

Jobs data, oh boy…

8:30 AM
Jobless Claims: New unemployment claims for the week of October 4th, to show the number of individuals who filed for unemployment insurance for the first time. The fewer people filing for unemployment benefits, the more have jobs, the more income in the consumer’s pocket, as well as a forecast on the strength of the economy. The consensus is for an increase of 480K. The labor market is extremely weak, let’s hope that there is credit available for those who aren’t on this list to receive their paycheck.

10:00 AM
Wholesale Trade: Measures the value, in dollars of sales made and inventories held by merchant wholesalers. It is a component of business sales and inventories. A drop in inventory creates a need for manufacturing and production, alongside a sign of consumer demand. A very worthwhile forward looking indicator.