World markets are in rally mode this morning, with S&P futures breaking 1300. The euro is going nuts.
If you want an explanation for this micro-burst of optimism, we’d suggest looking at two things.
- First, Greece. It’s clear that the austerity vote is passing, and that the anti-chaotic status quo will persist. Nothing is solved, obviously, but two weekends ago we were talking about a “Lehman Weekend.” At some point in the future the whole ship might go down, but it doesn’t look like it will be this week.
- Meanwhile, the Japan “V” is on. We got good data on Tuesday, and then today Japan reported blistering growth in industrial production.
So if you figure that a Europe implosion and the Japanese earthquake were two big things holding things back, then at least these clouds are lifting.
Of course, then there’s another big problem: A weakening US recovery, and looming austerity on the way. This cloud doesn’t seem to be going anywhere.
Here’s a look at the S&P 500 futures over the last several days.
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