Chinese PMI comes in stronger then expected
The Chinese surprise PMI is credited with lifting the European markets and that had obviously overflowed into the US futures. A rise in US consumer confidence certainly didn't hurt the market being bid up as well as speculation that the European Central Bank may engage in outright purchases supporting the markets. Key phrase here is “rumor” but rumor is enough.
As mentioned in last night's post, the contagion risks can be judged by European bond sales and the yeild they command. Today Portugal held a bond auction, the anticipated yeild was 5%, it came in worse at 5.281%. The last auction came in at 4.813% These are the rising costs that led to speculation of a bailout and eventually most probably a bailout will be needed as the borrowing costs start to exceed what the country can afford to repay. However spreads have tightened on the rumor of an ECB QE program that may be announced tomorrow.
Here's how fast and out of control borrowing rates can get, this is Ireland's 10 year note.
IRELAND1
Employment data from Challenger and ADP were at odds with each other. Challenger seeing an increase in layoffs, while ADP came in at +93k vs expectations of +70k.
However, ADP's estimates have had a track record of being significantly off the mark.
European economic data today was throughly “MIXED”. There's so much I can't list it al, but for every positive there as a negative. I'll lok through it more closely for any country specific trends.
The U.S. ISM Manufacturing number came in as expected at 56.6 (expected 56.5) however the whisper number was said to be 60. The concept of the whisper number is a private number that Wall Street expects, but it s not the same as which is released by analysts. Usually when you hear about “the whisper number” it pertains to earnings, thus companies that beat are often sold off as they didn't make the whisper number. The current reading is a decrease from October at 56.9.
More breaking news:
"US official says US would be ready to back larger European financial stability fund via increased IMF commitments."
Here's what happened with the Euro/Market
More Coming, in the meantime something just spooked the market. Perhaps something was found in the Fed lending release.
SPY
10 comments:
It was about that time the WSJ come out with a report that the US has not been in talks to increase it's obligations to the IMF for a Europe bailout. Of course the market didn't go done the same amount it went up on the news.
Do you have a link Jack?
Bad News For Euro Rescue: US Is NOT Discussing Larger IMF Contributions To European Rescue Funds
Submitted by Tyler Durden on 12/01/2010 13:22 -0500
International Monetary Fund
According to the WSJ the US is not discussing a larger IMF contribution to the European Rescue Fund. EURUSD plunging now. The theater continues. And since the market went up on the news, why would anyone expect it should go back down when the news is refuted. The market is now a total and complete travesty.
What about oil brant? currently up over 3%... so much for looking negative.
By the way it appears that Wikileaks website has been shut down now as well. What does that tell you!!!
Brandt,
I don't know why you posted this chart:
http://4.bp.blogspot.com/_gGhyx-JKKA8/TPaNUAFsymI/AAAAAAAAICk/PLE-PpUfGi8/s1600/spy+1+min.png
and put your little red box in. It means nothing, you posts an almost identical chart last night at the close. Didn't stop the SPY opening up 20 points did it?
Seriously, what do you expect us to do? Trade on these charts your post? How the hell can you expect us to do that when they can be proven to be so wrong. They are useless and tell us nothing.
How about posting the SPY daily chart? I'm sure meee will ask, i'd love to see how that's progressed, i bet that 3C line which was a leading negative divergence has now shot up to the moon? Correct?
On the DOW, we are now only 150 points off of the nov 7th 'top'. So, 3C has been saying how bad things look, and yet, in 1 single day (a day which 3C didn't foresee as a 'bounce'), we have recover nearly all the loss made since 7th of Nov. In that time we've had:
$dollar gain huge against the EURO.
Ireland crisis.
Foreclosure scandal.
And a ton of QE2 POMO which app.
... and yet the market is up still near highs.
"Mr Pink said...
How about posting the SPY daily chart? I'm sure meee will ask, i'd love to see how that's progressed, i bet that 3C line which was a leading negative divergence has now shot up to the moon? Correct?"
Not exactly-just posted for you
Jack I'd say from the looks of things, it didn't drop to the same extent because it will be distributed at higher prices rather then taking a straight drop loss. Also they did say there were not talks, but did not come out and explicitly say "Out of the question".
As for Wikileaks, the charges and the site now down, there's something they have over BAC that is very serious. In an interview with a computer magazine a few months back, he confirmed they have 5 gigs worth of info on BAC. Why they don't admit it now, I don't know. the cat's obviously out of the bag.
Whatever it is, it must be pretty serious considering the last 2 days developments re: WL
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