The shortened trading week was anything but uneventful. After heavy global equity losses caused by increasing recession fears, last Tuesday the Federal Reserve made a surprise 75-basis-point cut in the Fed Funds and Discount rates to 3.50% and 4%, respectively.

In its statement, the Federal Open Market Committee said: "The Committee took this action in view of a weakening of the economic outlook and increasing downside risks to growth. While strains in short-term funding markets have eased somewhat, broader financial market conditions have continued to deteriorate and credit has tightened further for some businesses and households. Moreover, incoming information indicates a deepening of the housing contraction as well as some softening in labor markets."

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