Business Blog: Hoover’s Business Insight Zone

Well, Visa was certainly everywhere investors wanted to be today. The credit-card outfit rode its world-famous name brand — and a strong afternoon rally from financial stocks — to a $17.9 billion IPO, the largest in US market history.

Adding to the fun were strong financial results from powerhouse Goldman Sachs and from Lehman Brothers, which dispelled liquidity concerns to see its shares rise more than 40%. The Fed joined in with a hefty 0.75% rate cut, and even the punch-drunk dollar surged against the yen.

So, jollity all around, yes? Err . . . no. Let’s start with the IPO market picture and move from there:

• As I’ve said before, these days the IPO market isn’t set by one company, especially when that company is a household name like Visa. Google was able to bring forth its monster IPO in the tepid market of 2004 . . . because it was Google. The same applies here.
• The Fed did what it did because its recent efforts to boost liquidity haven’t been enough to stem talk of a recession.
• The results at Goldman and Lehman are certainly nice, but they’re not nice enough to wipe away the fresh memory of the humiliating collapse of Bear Stearns.

So, to recap: great day on Wall Street today . . . future looks bright for Visa (and Goldman and Lehman) . . . but premature to talk about the financial markets as having emerged from the storm yet. I’d say the whole economy might want to keep the hatches battened down, eh?