Market Help To Stay Above The Water On Stimulus Rumors

Current Futures: Dow +10.00, S&P +2.00, NASDAQ +1.50  

European Trade: European markets are barely holding above the breakeven line, while the Asian shares closed the session posting very small gains. In addition, during the overnight market, the U.S. futures traded very light, but managed to stay in positive territory.

Currently, markets are holding in positive ground, as rumors emerge that the Treasury and the President-Elect Obama are planning to take further steps to help the U.S. economy. Mr. Paulson plans to ask for the second part of the $700 bailout money, in order to expand the Troubled Asset Relief Program (TARP). Sources have said that the first half has nearly dried up, especially now the Treasury may have to help both GM and Chrysler.

In addition, Mr. Obama plans to implement an $850 billion plan for infrastructure and social services, in order to stem the rising wave of unemployment claims. Later today, an economic report is expected to show there were 558K persons who filled for unemployment claims last week, after the same report reached a 26-year old high last week.

In the overnight session, the Nikkei gained 54.71 points (0.64%) to 8,667.23, while the Australian S&P/Asx rose 10.60 points (0.30%) to 3,581.20. In Europe, the Ftse gained 8.78 points (0.20%), at the same time the German Dax rose 18.20 points (0.30%).

Crude oil declined, even though the dollar sold across the board and OPEC announced a cut in production. Crude oil for January delivery fell $0.20 to $44.70.

Gold is continuing to advance, reflecting the dollar weakness. Bullion for immediate delivery rose $1.20 to $863.60.

Previous Asian trade: Asian markets are trading barely above the breakeven line. Earlier, the U.S. equity markets closed in red, despite that the Fed announced new measures to tackle the credit crunch just one day before. 

The Japanese economy takes hard hits from the credit crunch. The economy is facing a rather severe recession and the weak internal consumption only makes things worse. Some union workers already excluded the possibility of demanding higher wages in 2009, while the main business groups in Japan declare they are doing everything they can to keep the maximum number of employees next year. Out of the public traded companies in Japan, some had cut their earnings forecast in half for 2009, showing the magnitude of the downturn. Predictions are that the Japanese economy is going to contract by almost 1% in 2009, bottoming only by the end of the year.