I’m not an economist or an expert on the policies of socialism, but I do know that it was crunch time yesterday for Europe. Something really bad was close to happening. Futures were very weak pre-open yesterday until the markets were hit with a confluence of good news. First China eased, then ADP had a decent employment read (they are usually wrong but who cares), but the big kahuna was the world’s major central banks joining to provide cheaper dollar funding to European banks. Has the U.S. put themselves “all in” by yesterdays action? Scary if true.
In a dose of reality, the ECB’s Drahgi signaled that the bank (ECB) will not backstop the eurobond market and said interventions will “only be limited”. Bank of England’s King said “the spiral facing banks looks like a systemic crisis.”
This doesn’t mean that the market won’t rip higher, it just means that Europe seems helpless without outside support. In simple English this means that their gooses are cooked without help from the U.S., China, Russia, South America, the IMF and the ECB.
Yesterday was month end and every hedge fund monkey took out offers to stay in stride with all the other hedge fund monkeys doing the same. About 70% of trading is automated now, so the machines just cranked buy orders until 4PM. It goes the other way on the downside at times. We’ve rallied almost 100 S&P handles in three days. Booyah. It was tough to get long yesterday because of the gap, so this could send us higher as people get that “I don’t want to be left behind” feeling. We have seen this many times before and this has become more of a circus act than a market, but it is what it is. Don’t expect it to change anytime soon. It’s all fun and games until someone gets poked in the eye.
Interesting thingy: The Empire State Building is going public. I hear $LNKD, $GRPN, $P and $ANGI are looking for prime space.
Today’s Data:
-November jobless claims at 8:30
-November ISM Manufacturing at 10:00
Good luck today
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