Just as markets that are strong all day (with 2:1 positive breadth of advancers vs. decliners, or better) tend to end that way, the bulls are betting markets that have been strong all year — with 92.2% of the S&P 29% higher on average — will follow a similar script. Past performance is no guarantee of future return, but while history doesn't always repeat, it often rhymes.
Sir Isaac Newton once determined that for every action, there is an equal and opposite reaction. The Federal Reserve is trying to disprove that law of motion, asserting it will avoid massive losses by never selling the mortgage-backed securities on its $2.84 trillion balance sheet. Cue Mel Brooks in History of the World: "It's good to be the king!"
There are several hot-button issues emerging — the prevailing direction of social mood (see my story "Why Kim Kardashian Matters to Social Mood" below) and increasingly strained foreign relations, among them — but they've seemingly been drowned out by a flood of profits. And as we know, politicians view the stock market as the world's largest thermometer.
Twitter opens for trading on Thursday — presumably in 140 characters or less — which will highlight a busy week for financial markets. Monday is the deadline for Fairfax Financial to buy BlackBerry, the ECB will announce its rate decision (and perhaps further market operations on Thursday), and October non-farm payrolls will be released on Friday, complete with an asterisk for the government shutdown.
More from Minyanville:
Why Kim Kardashian matters to the stock market
So much for story stocks? What a Tesla top could mean for all stocks
Hey buddy, can you spare a market pullback?
Tim Cook Is dreaming of an iPad Christmas
Bulls and Bears still batt! ling over stock market treats
This story was originally published on Minyanville. Its content is produced independently of USA TODAY.
No comments:
Post a Comment