It’s a happy Wednesday indeed when everything once again opens up in the green. This little rally we’ve seen over the last couple of weeks is really creeping up on people.
What’s behind the rush to risk?
As I see it, it’s two things. The first is Europe, where there’s finally a perception that stabilization is taking place. For proof, look no further than yesterday’s decision by Slovenia not to back the expansion of the European Financial Stability Facility, which the market essentially shrugged off. The world is coming around to my way of thinking and reaching the conclusion that out of this crisis will emerge a stable, strong European Union.
The second is our United States Senate, which yesterday killed my fellow Chicagoan’s $450 billion American Jobs Act. As you’ll recall, I was no fan of the bill and the Taxulationist provisions that it contained. And as it turns out, neither were all the Senate republicans and two democrats. We’ve still got a long road ahead and a lot of political headwinds, but this could be a sign that there’s light at the end of the tunnel. And, most importantly, the market seems to like it.
Pay attention to cash flows—that will tell you where the market is going. On the show this morning, Alan Rohrbach, president and lead analyst of Rohr International, pointed out that classical intermarket influences are operative again, which is a fancy way of saying that as stocks go up, bonds go down and the dollar goes down, which helps push commodities and energy up.
Alan also reminded us that recently, equities have done well at the beginning of earnings season. There is still a lot of unemployment out there and a lot of trouble in the housing sector that will affect market psychology. We may not truly know how the market is trending until late next week or early the following week.
Howard Marella, president of Index Futures Group, stopped by the studio this to bring us up to speed on the World Agriculture Supply and Demand Estimate he talked about on last Friday’s show. High expectations for a bullish report drove corn to a limit-up yesterday, but the numbers came back a little disappointing. Still, he’s bullish, and of all the grains, corn is looking like the most tradable right now.
Newsbusted: Planned Parenthood, Cecil the Lion, Hillary Clinton, Jim Gilmore, Christ Mathews, Debbie Wasserman Shultz