Macro

Henry Kaufman of Salomon Brothers reversed his bearish stance, predicting a sustained decline in interest rates due to weakening economic prospects, which sent Treasury yields plunging and bond prices surging. The shift, echoed by First Boston's Albert Wojnilower, reflects deteriorating business and consumer outlooks, increasing recession risks despite potential inflation relief. Market implications include lower yields, a weaker dollar, and rising gold prices as investors flock to safer assets.

The New York Stock Exchange recorded its first 100-million-share trading day, driven by a surge in investor confidence following economist Henry Kaufman's revised interest rate outlook. Institutional and retail investors flooded the market, signaling a potential bull market turnaround. The rally boosted global equities and pressured the dollar and gold, while analysts remain divided on its sustainability.

President Jose Lopez Portillo nationalized Mexico's private banks and imposed exchange controls to stem capital flight amid a severe economic crisis marked by repeated devaluations and soaring inflation. The move excludes foreign banks and aims to assert state control over financial resources. Markets may face heightened uncertainty, though the government promises compensation to affected shareholders.