Courtesy of John Nyaradi.
Santa Might Have Finally Arrived this year on positive news of Europe, New Home Starts.
Stock markets rallied hard today in response to positive news in Europe and at home, as The Dow (NYSEARCA:DIA) rose over 300 points while the NASDAQ (NYSEARCA:QQQ) and S&P 500 (NYSEARCA:SPY) registered meteoric 3% gains.
Most of the hype was centered on a hopefully better Euro situation (NYSEARCA:FXE), as the ECB offered historic interest rates on loans to large banks to buy up debt while a Spanish Bond Auction went better than planned. Several German (NYSEARCA:EWG) economic reports were positive as well; perhaps Santa will dawn his hat across the Atlantic this year.
The good news continued at home with news of 9% improved Home Starts in November (NYSEARCA:ITB) versus previous months. Although the US economy still has a long ways to go, particularly in the housing industry (NYSEARCA:ITB), we are gaining traction ever so slowly. Hopefully Santa will continue to have more chimneys to fall into this holiday season.
In other news, oil surged today (NYSEARCA:USO) on hopes of a healing economy and activity; while US Treasuries slid today (NYSEARCA:TLT) on a worse than anticipated 5-year auction. The Vix (NYSEARCA:VXX) responded in kind to today’s positive news by sliding off of a cliff, as investors don’t seem to carry fear anymore of the possible Armageddon looming ahead. At least Santa warded it off today.
Bottom line: The US Economic recovery still remains tenuous, at best, despite signs of improvement at home and abroad. Again, however, the Western World simply has too much debt to continue easing the world-wide credit crunch for much longer, and any hick-up across Atlantic could severely cripple US gains. For now, at least we can hope that Santa will carry us in cheer into the New Year!
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