Courtesy of John Nyaradi
Today’s impressive rally in the U.S. stock market is little more than “white noise,” as the macro picture remains glum, problems in Europe aren’t going to suddenly go away and the technical picture remains unchanged.
On a macro level, the “good” news today was based on President Obama’s widely anticipated “jobs” speech tomorrow night in which he is going to announce a $300 Billion program to create millions of jobs. Just two problems here. This is more spending in a time of deficit reduction and the Republicans promptly said they’re going to oppose it and so most likely gridlock will continue.
The only bright news today was the Fed Beige Book report which showed modest growth in the Fed’s regions and the widely expected approval of the Greek bailout by a German high court. However, even that “good news” for Europe came with restrictions on Chancellor Merkel’s ability to commit more aid to the sinking Greek economy.
Speaking of Greece, the yield on the 1 Year Greek bond approached 97% today, which is truly remarkable and obviously unsustainable.
Up the Mediterranean in Italy, yet another austerity program was approved and this exercise seems to be coming a near weekly event.
Gold fell today even though it’s likely that recent Swiss National Bank action to buy Euros would be bullish for gold.
On a technical basis, the major indexes remain locked in a trading range between recent highs and lows and until there’s a break one way or other, all of this violent action is merely annoying white noise.
All in all, we still are in dangerous waters and as I wrote this week on MarketWatch.com, “Here Comes Lehman 2.0.”
Stock Market Summary:
DJIA: (DIA) +275; +2.5%
NASDAQ (QQQ) +75; +3.0%
S&P 500 (SPY) +33.4; +2.9%
Russell 2000 (IWM) +28.6; +4.2%
Tomorrow’s major economic reports are the new and continuing unemployment claims and in the evening we have Presiden’t Obama’s major address on the same subject.
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