Wednesday and Thursday were unusual for 2012, which has mostly been placid.On Wednesday morning, markets were booming around the world.
Then on Wednesday afternoon things started breaking, with Apple falling, and the rest of the market going down as well.
Things were looking negative on Thursday morning, but by Thursday evening, everything was surging like crazy again.
Deutsche Bank’s Jim Reid has the best characterization of it:
It really did feel like four seasons in one day for markets yesterday as Europe seemingly woke up in Winter and after working our way through some squally turbulent morning headlines, Spring bloomed with the stronger US data before Summer burst through as hopes over Greece soared reversing the complete pessimism earlier in the day. Indeed the market was encouraged by reports that European governments may reduce the interest rates on Greece’s bailout loans and also that the ECB is ready to get involved in the debt restructuring. Die Welt headlines noted that Eurozone central banks may exchange their Greek bonds for new bonds. The Irish Times overnight noted that ECB’s Greek bond holdings will be swapped into new bonds but will be excluded from the PSI operation and exempted from CAC clauses. Given the fiscal slippage the Troika now estimates that Greece’s Debt/GDP will reach around 129% under the current rescue framework. This is above the 120% objective set back in October.