GE & Berkshire Hathaway lost their AAA (S&P) rating

Ø       An optimistic start to Friday the 13th ! DJIA +3.46%, s&p500 +4.07, NSDQ +3.97%. US stocks have posted the biggest 3 day gain since November 2008.

Ø       GE gains 13% despite losing the AAA (S&P) rating that it has held since 1956. The company says the loss won't hurt business. Bk of America +19%. General Motors jumps +17% after saying it will not require US aid this month.

Ø       Warren Buffet's Berkshire Hathaway also losses its AAA rating (from Fitch).

Ø       US retail sales data pleased the market: sales dropped just 0.1% in Feb vs the expectations of -0.5%.

Ø       Big gains in Asia: Nikkei +5.15%, Hang Seng +3.84%. Both Japan and China have signalled that they are ready to implement more measures to bolster their economies.

Ø       Crude oil back to $47 (4^th week of gains), supported by equity rally. OPEC meeting this weekend could deliver further production cuts, they have already reduced output targets by 4.2 million barrels since September.

Ø       Gold slightly weaker @ $921. Rebound in equities lowers demand for a safe haven.

Ø       Surprise move from the Swiss National Bank which intervened on the currency markets to weaken the CHF. First time a major central bank has intervened in the fx markets since Japan in 2004. The value of the CHF has risen as investors sought a safe haven from the market turmoil. Speculation that Japan may be the next to intervene on its currency.

Ø       € gains vs $ (1.2930). ECB member Yves Mersch (a voice from Luxembourg!) says that he does not see deflation risks in the 16 nation region. AU$ and NZ$ rise on the back of equity market rally. Investors moving back to higher yielding currencies.

Ø       VIX remains at a low level: 41.20

Ø       10-2yr spread @ 145bps. 5 yr CMS @ 2.78%, 3yr CMS @ 2.29%.

Ø                          Europe up this morning: +2%.

 

 

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