A Massive Reversal or Long Live the Fed
Quite frankly, it looked like the markets were going to crash on Thursday, led down by the absolute disaster in financial stocks. Fortunately, a funny thing happened on the way to the potential collapse. At about 1 p.m. Thursday, the financial stocks, as well as the rest of the market, found their footing, and the market had one of those dramatic reversals. Did the market know that the Federal Reserve was going to cut the discount rate, or did the market just bounce off of support? We may never know the actual reason, but it is sure interesting to think about.
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