Business News
Beware the sons of bitches, Ben
by Peter Switzer
Wall Street gave another solid lead for local stocks today with the Dow up 143.95 points, or 1.29 per cent, to 11,320.71. The S&P 500 was up 1.31 per cent to 1177.6 and the Nadaq is up more than five per cent in three days.
And while it was a seesawing day, the good sign was that the market finished strongly into the rally at the closing bell. What we’re looking for is a market admission that panic drove share prices down too far.
Of course, the big driver is undoubtedly the hope that the US central bank boss, Ben Bernanke, will say or do something that could justify this three-day gain but we have to wait until Friday for that significant market maker or breaker.
Developments overnight
- The VIX or fear index has fallen below 40 to 35 — that’s still too high to get too relaxed.
- Gold fell more than $100 to US$1760 per ounce.
- Bank Of America rallied over 10 per cent and this bank has been trashed recently and has attracted some “buy” ratings.
- But the best one was the fact that durable goods orders were up more than expected. This conflicts with the latest manufacturing data but I will take a positive today when I am tipping an economic pick-up in the fourth quarter, though the latest economic data has me a tad worried.
- US home prices were up 0.9 per cent in June.
- European shares registered a one-week high.
- Investors turn up in droves when the S&P 500 hits around 1125 and that could discourage bears who want to take the index below the 1000-mark.
Sure there’s some negative news around but the reason for the rise and the focus for Friday gets down to one thing — what Ben says at Jackson Hole. A lot rolls on this guy’s utterances and he knows it — confidence is key at this point in both the economic and market cycle. Gee, I hope, like so many politicians and officials lately, he doesn’t stuff up!
As I’m writing this from Palm Beach, Florida, I guess I should add — those sons of bitches hedge funds and short-sellers are watching Ben’s words with their fingers on the sell button.
Important information:This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.
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Published on: Thursday, August 25, 2011
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