Comment:

The testimony of Ben Bernanke on his handling of the Bank of America, Merrill Lynch merger before the House Oversight Committee didn’t exactly move the market higher, but they didn’t hurt it either. It was more a case that Bernanke did not damage his reputation as he defended his role and that of regulators in the hastily arranged marriage of Bank of America and Merrill. Bernanke also reaffirmed that he did not threaten Bank of America CEO Ken Lewis or lead him to hide information that should

have been reported.

It’s hard to believe the US will see a dramatic change to the economic landscape anytime soon. Even in its statement yesterday, the Fed said the “pace of economic contraction is slowing.” That’s certainly better than the alternative, but it’s a far cry from growth. The massive stimulus efforts from the government may well pay off down the road, but it is unrealistic to expect any real effect for quite some time.

Consumer spending drives the US economy. According to the most recent statistics, stimulus efforts added $44 billion to Americans’ after-tax income in April while household savings increased three times that much ($131.5 billion) so it appears people are saving that stimulus money.

Today no news from the UK but in the U.S, investors will watch data that deals with the consumer, personal income and spending is released at 1.30pm, and consumer sentiment at 3pm.

UK and European markets have opened up over one percent, and U.S. markets are currently pointing to a negative start to the Dow but a slightly positive opening’s for the S&P and the Nasdaq exchange when their markets open this afternoon.

Sources: Reuters: BBC: Bloomberg: Lawshare: Deutsche Bank (db): Proquote: Financial Times:

Wall Street Journal: CLSA: Sharescope: Market News. Capital Economics: CNBC: Wikipedia:

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