Wall Street Brokers rally on Fed Rate cut.

The Wall St. brokers are rallying today after the Fed rode to the rescue by lowering the discount rate by 50 basis points today before the market opened. We see Bear Sterns, (NYSE:BSC) up $2.61 on strong vol. of 17.45 million shares. BSC is strong in fixed income along with Lehman Bros., (NYSE:LEH) also up $3.42 on vol. of 24.7 million shares. LEH also strong in fixed income.

Goldman Sachs, (NYSE:GS) up $4.38 on strong vol. 24.05 million shares. GS has traded as high as $180.86 in intra day trading.

Morgan Stanley (NYSE:MS) up strong by $3.33 on strong vol. of 21.6 million shares.

Merril Lynch (NYSE:MER) up $5.23 on vol. of 24.55 million shares.

The dollar was weaker today as the Yen rose to 114.43 in trading today. What this means is that it now takes 114.43 Yen to buy a dollar where over the past weeks it took as many as 124 Yen to buy a dollar.


GOIH Commentary:

Now that the Fed has lowered the discount rate what is the big brokers next move to make money?


We expect to see trading profits higher for all of the big brokers due to the volatility in the market. The big brokers are on both sides of the same trade and make money up and down as well as loan to hedge funds in the prime broker capacity.

We see gold increasing as a hedge against the inflation that is implied in the easing of interest rates implying a decrease in the dollar.