by Peter Switzer
Remember earlier this week when the market was worried about Ireland and China? Well, all is forgiven or forgotten, at least for the moment, as Wall Street charged into another rally. And driving the resuscitated optimism was the bumper GM re-listing, better news out on Ireland’s debt drama and some good US economic data.
The Dow finished 173.35 points or 1.57 per cent higher to 11,181.23 and the S&P 500 added 18.1 points or 1.54 per cent to 1196.69
Let’s start with the GM story. This re-worked carmaker listed at $33 and shot up seven per cent on the opening bell and not only will it deliver $23 billion to the company, but it has cut the government’s ownership from 60 per cent to around 40 per cent.
This was a company that dropped about $200 billion from 2006 to 2009, so its re-invention is a massive shot in the arm for US capitalism.
From Ireland, a bailout involving tens of billions of euros gave Wall Street less to worry about. It also liked the Irish Government looking more realistic about its predicament and its receptivity to doing what the EU number-crunchers are advising.
From the all-important economic stats department both the leading economic indicators and the Philadelphia Federal Reserve survey — which is an assessment of manufacturing, pointed to an improving US economy.
The Philly-Fed number was a corker rocketing from a reading of 1 in October to, wait for it, 22.5 in November. I never get carried away by one number, but this is extraordinary and could even end up being a historically significant jump.
Also average new jobless claims fell to a level not seen since 6 September 2008. This was nine days before Lehman Brothers filed for bankruptcy, which was also a very historically significant event.
A final note — I am off to New York to my record SWITZER program from Wall Street and its surrounds. We are looking for Aussies making it big in the Big Apple and we will talk to a few big US kahunas as well. So look out for some great interviews over the next two weeks.
Next week on the show there are two great interviews with Gerry Harvey and John Symond, which I think were pretty special. Hope you enjoy them.
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Published on: Friday, November 19, 2010blog comments powered by Disqus