Today showed a HUGE reversal from yesterday’s miserable action, not just in US stocks, but in every key market around the world. US equities have now erased their losses for the week. Crazy.But first, the scoreboard:
- Dow: +286 (+2.8%)
- NASDAQ: +82 (3.7%!)
- S&P 500: +35 (3.3%)
And now for some key stories of the day:
- Things really seemed to hinge on the noise out of China that it had no intention to diversify away from eurozone bond holdings — contradicting a report from FT yesterday. We argued that the FT story never made any sense, so we’re inclined to believe China’s statements. If anything, it’s in the interest of Chinese leaders to prop up the euro, and save its own manufacturers’ already razor-thin margins.
- Ironically, the only economic news today was bad: GDP came in weaker than expected, and initial weekly jobless claims also confirmed the stalling out trned.
- It took more than a month, but Barack Obama finally gave a press conference on the Deepwater Horizon oil catastrophe. It did not go particularly well, as he was, in essence, forced to side with BP’s handling of the crisis — an awkward position, to say the least.
- Also on the BP front, the company spiked on news that the oil leak has stopped, BUT this is not the end of the story at all. Next stage is the cement pouring, and we have no guarantee yet it will work. But, at least we’re making some progress. Also, based on some estimates, the total leak now stands at 666,666.666 barrels, a very ominous number indeed.
- In addition to the surge in equities, just about every other “risk on” measure was positive, including a surge in the Aussie dollar, a surge in industrial commodities, and a slight slip in gold (though not huge).