Posted by John_NorCal on 10/1/07 9:09am
Msg #213990
Rough start on this 1st day of the last quarter
Good Morning!
Today is the first day of the 4th quarter and we are off to a rough start as two major global banks reported new problems by subprime mortgages. Citigroup, the nation's largest financial firm, announced it would take a $3 billion charge for underperforming mortgage securities. It also warned it will see earnings per share fall by 60 percent in the just completed third quarter. Swiss Bank UBS also announced it will take a $3.4 billion hit in the third quarter due to problems stemming from the subprime mortgage crisis.
This week is a heavy week for the economic calendar that could determine if the Federal Reserve will continue its course of rate cuts. The reports start with the closely watched survey of manufacturing executives from the Institute of Supply Management. Economists expect the ISM reading for September will slip to 52.5 from 52.9, although any reading above 50 indicates growth in the sector.
The most closely watched report won't come until Friday, when the government releases its monthly employment report. Weakness in that report could give the Fed more reason to keep lowering rates. At the same time, it could also raise investors' recession fears.
SCME Mortgage Bankers announced on Friday it will be closing down.
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