"The Bundestag (lower house) overwhelmingly approved new powers for the 440-billion-euro EFSF fund to make precautionary loans, help recapitalize banks and buy distressed countries' bonds in the secondary market."
The markets welcomed this news as a sign of greater European solidarity as fears of German non participation in the bailout receded. The Frankfurt DAX which had fallen almost 35% from the highs has been rallying strongly recently as German chancellor Angela Merkel has reiterated that the EU would not let Greece default and would keep the EU together.
Other good news in the markets today was US 2nd quarter GDP was revised upwards to 1.3% from a previous 1% print. This was on the back of better consumer spending and exports than previously thought.
Initial jobless claims also came in better than expected alleviating fears that the United States was sliding back into a recession. Initial jobless claims came in at a seasonally adjusted 391,000 which was much lower than the 420,000 that economists had forecast. Initial jobless claims measures the amount of new people filing for unemployment benefits in the past week.
Markets are strong across the board this morning with the Dow up 200 points as of 7:23 AM PST. The SNP 500 and NASDAQ are also solidly in the green up 1.4% and .67% respectively. European stocks are up as well with the German DAX and Paris CAC up over 1%. Across South America, the Brazilian Bovespa was up 1.3% and the Mexican IPC Index was up over 2%.
Well, today had to be a frustrating day if you are a bull or a bear! Markets opened up strongly and then sold off all day going from 250 pts up to 50 pts down on the DJIA only to rally in the final half hour to end up 143 pts higher.
The interesting thing about today's market was the complete obliteration of some of the best performing momentum stocks today. AAPL, BIDU, GMCR, AMZN, FOSL, RL all were clobbered today. BIDU was down over 9% today on no news that I can see. AAPL was down 1.6%. All these had done well this year and with end of the quarter window dressing, I would have thought they would be going up on a good day like today. It seems fund managers may be dumping the stocks they have profits in and scooping up perceived bargains like bank stocks. Bank stocks were up across the board today with BAC and C up over 3% today.
I got stopped out of AAPL today with a 4% loss. It was a poor trade all around and I seem to have lost my mojo with AAPL for now and I will stay away from trading it for awhile. I have almost given up all the gains I had for the year with the last few poor trades. My XLE trade is working well for now (fingers crossed) although it did not look so good earlier in the day. Today's close was quite powerful and I look for a continuation of the strength into tomorrow. We should be able to get some follow through.
Disclaimer: Nothing in this blog should be construed as a recommendation to buy or sell any securities! Please do your own due dilligence before buying any stocks or bonds!