Monday, September 12, 2011

Rumor Monday

Europe looked very dismal this morning with several indexes down 4-5% before beginning a sharp reversal once the US markets opened.  Rumors of emergency market interventions seemed to have stabilized things for the time being but the situation remains very fluid.  The market it seems can never get enough QE or cowbell for that matter.

The explosion at a nuclear waste processing facility in France didn't help calm nerves but that story was quickly put to bed.  "There was no leak.  Move along." :)

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Update: Things have weakened again as expectations for future stimulus seemed to have stalled a bit.  Oh, and Greek debt - yikes!!!  The yield (interest rate) on 1 year notes from Greece hit 139% today.  That's clearly an indication that there is no expectation Greece will be able to make good on those payments.

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Update 2: Holy rally batman!  The markets went off to the races in the final minutes on a strange article from the FT.com that hinted at a possible Italian bailout by the Chinese.  However, just three days ago, the Italian Economy minister said Asian investors were hesitant to buy Italian debt.

It doesn't look like much (Dow up 70 and Nasdaq up 27) but given the crushing blows overseas markets received today, this is a pretty stunning performance. 

I don't think there is much to this rumor, but it doesn't matter what I think, because the market bought it with both hands today.

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