Morning Call by Greg Secker

Well what a day we had on the markets yesterday! Following the announcement of Lehman’s move into Chapter 11 and the follow-up of the Merrill Lynch buyout I think it was fair to say that we expected a fair amount of carnage in the market. And that’s exactly what we got!

So yesterday few markets escaped the panic that was borne out of a series of events that, in the end, may spell disaster for the global financial system. Assessing the damage, we can see that equities plummeted through all time zones. The primary risk asset for most US investors is the benchmark Dow Jones Industrial Average which tumbled over 500 points to close below 11,000 for the first time since July 17th where it closed on its lows at 10917.

The FTSE naturally tumbled yesterday on the back of the events and gapped down on opening over 100 points before racing towards a drop of nearly 300 points from Fridays close before rallying in the afternoon.

Today should be an interesting day. We have a slew of important economic data coming out that can either add to the panic or cause the freight train to at least slow down. We have German, British, Euro-Zone and US Consumer Price Index data out today. We also have the US TIC flows before at 2pm BST before the FOMC decision tonight at 1915 BST. Naturally people will be interested to see what is said at that meeting after the last fortnight’s tumultuous events. Whether we will see a panic cutting of rates remains to be seen.

The DOW Futures are being called down -85 and the FTSE daily future is being called down 130 points. Crude Oil is trading at 91.68 dollars a barrel and Gold is trading at 775.9 dollars a troy ounce.