Wednesday, October 1, 2008

Markets flat in advance of Senate vote

New York ended largely flat today as traders avoided commitments in advance of the Senate vote on the financial bailout bill. Oil backed off to $98 while gold held firm near $890 in the day's trading. As I write this, the Senate has just voted in strongly favour of the bill and oil has gained a dollar while gold has dropped $13 to $874.

While the bill was widely expected to pass the Senate, the margin was encouraging for nervous investors (74-25) and should push markets higher tomorrow and likely into Friday. I'm still not convinced the rally will extend to the close on Friday, but certainly we should see some decent gains here. Gold may become a great buying opportunity at $850.

As predicted earlier in the week, the Euro has fallen below 1.40 and may go lower. It closed today at 1.3967.