Morning Economic News - October 29, 2008

Tuesday, markets shrugged off the news that the Consumer Confidence Index had plunged to an all time low in September as it merely added fuel to the fire for a half point interest rate drop from the Fed Wednesday. Overnight, Asian markets are full steam ahead, though not up by the 10% plus that the Dow rose Tuesday. US markets are likely to give back some of the gains, with stock market futures down about 1% from the close at this writing [2 AM Eastern]. Oil prices are up slightly as the dollar has lost some value against the yen, euro and pound. Markets are working hard to find a bottom, but volatility is likely to be the rule of the day at least through the end of January, so trimming yesterday's gains should be no surprise, though the actual Fed announcement could move markets either direction depending on how the accompanying statement is interpreted.

Consumer Confidence Index - September 2008

• Consumer Confidence Index: 38


• Monthly Change: Down 23.4


• Present Situation Index: 41.9


• Monthly Change: Down 19.2

Economists Search for End of Woes

Economists struggling to gauge the depth of the U.S.
downturn are turning to more forward-looking clues, such as
home-vacancy rates and foreign stock markets.

Americans Still Buying in Europe

American investors continue to acquire more European properties than they sell, although sales are off sharply.

Fed May Cut Rate to 1% in `Very Aggressive' Response to Crumbling Economy The Federal Reserve may lower its
benchmark interest rate to 1 percent today and signal further
reductions to levels unseen since Dwight Eisenhower was
president.

Bank of Japan Interest Rate Cut Speculation Increases After Nikkei Report Speculation the Bank of Japan will
cut interest rates for the first time in seven years jumped
after the Nikkei newspaper reported that the central bank may
halve its target rate this week.

Home Prices Will Hurt U.S. Economic Growth More Than Stocks, Survey Shows Plunging home prices will cut economic
growth in the U.S. more than the drop in stock prices this year,
economists at the University of Southern California and the
University of California, Los Angeles, said.

Japan Small Business Confidence Falls to a Decade Low as Economy Stagnates Confidence among Japan's small and
midsized companies dropped to a decade low as a faltering
economy weighed on profits.

Fed Creates $15 Billion Swap Line With New Zealand to Ease Credit Squeeze The Federal Reserve authorized a $15
billion swap line with New Zealand's central bank to provide U.S.
dollars in the country, the 10th such currency-exchange program
aimed at easing the worldwide credit freeze.

Australia Faces First Recession Since '91 as Resources Drop, JPMorgan Says Australia faces its first recession
since 1991 as prices fall next year for iron ore and coal, the
nation's largest exports, according to JPMorgan Chase & Co.

Fed poised to fight crisis with another rate cut

WASHINGTON
(Reuters) - The Federal Reserve is widely expected to cut interest
rates by at least a half-percentage point on Wednesday in yet another
move to turn around the credit crisis that is threatening the United
States with a deep and prolonged recession.