All the major markets performed a 180 from yesterday. No new downtrend was established, and the S&P is still really close to all-time highs. Lolz.First, the scoreboard:
S&P 500: 12.25
And now, the top stories:
- “Today” really begin late yesterday afternoon when news broke that BofA was being sued by a group of investors demanding up to $47 billion in mortgage repurchases. That tanked the market yesterday and spilled though into global markets overnight. Japan got crushed.
- On the other hand, the Shanghai market — despite it being the first trading day post-tightening — actually rallied!
- Europe was pretty quiet. This is becoming a trend. Despite all the promising about how the underlying problems in the eurozone aren’t going away, investors are clearly getting pretty sanguine about the whole thing. After two days of selling in the euro, the euro surged today. At one point, Merkel even tried talking down the euro — by playing up the continent’s problems — but it really did no good.
- There was very little economic data in the morning, but there were several earnings reports. Morgan Stanley was a pretty big disappointment and its stock slid pretty hard. Wells Fargo was fine. Boeing actually reported pretty strong earnings.
- After some very jittery early action — with big-time selling in Morgan Stanley and Bank of America — stocks rallied throughout the day, exhibiting a fairly classic “risk on” day, at least by 2010 standards. You know what that means: dollar down, everything else up. It was textbook. One thing that happened was soothed nerves on the banking front. As people examine the Bank of America stuff more, they realise that the company isn’t on the verge of a major crisis anytime soon.
- At 2:00 PM came the Fed’s October Beige Book, and this was actually interesting. First of all, it was clearly better than September’s (less talk of deceleration) although the economy is still in a rut, and the labour market is really horrible. There was some instant fear that perhaps the better-than-anticipated anecdotal report might hurt stocks, by taking away the impetus for more QE. But nope. In this case, good news was good news. David Tepper is smiling.
- An interesting (somewhat) laggard: gold. It was up less than 1%, which was less than equities (very rare) and particularly weak given yesterday’s hard decline. The rally barely counts as a dead cat bounce.