Over the weekend, as we started to unpack the Madoff story we wondered if perhaps the markets on Friday hadn’t yet digested the magnitude of the news. Since the initial announcement, there’s been a continuing stream of victim announcements, including top European private banks, but the markets aren’t pricing in any immediate fallout:
WSJ: In midday trading, the Dow Jones Stoxx 600 Index gained 0.7% to 199.62. In terms of national markets, the U.K.’s FTSE 100 Index gained 0.8% to 4312.45. Germany’s DAX index was up 1.8% at 4749.33. France’s CAC-40 rose 1.2% to 3250.94.
Auto shares rose modestly, buoyed by possible White House help for the US auto industry. Daimler rose 4.6%, BMW gained 3.2% and Peugeot advanced 3.2%.
“A bailout for the autos industry is one less thing to worry about for investors Monday, and will certainly provide relief in the short term,” said Jeremy Batstone-Carr, strategist at Charles Stanley.
Meanwhile, the futures here are all positive.