"President Barack Obama plans to propose sparking job growth by injecting more than $300 billion into the economy next year, mostly through tax cuts, infrastructure spending and direct aid to state and local governments," according to Bloomberg.
MY TAKEMarkets are rallying on hope, because in this divided hyper partisan political environment, President Obama's jobs package is doomed to fail.
Stocks surged and recent safe havens like gold, treasury bonds and the dollar fell.
European stocks advanced strongly with the German DAX up 4.0% and the London FTSE up 3.1%. Buyers stepped in today on the removal of one impediment to Germany's participation in the European Financial Stability Facility or EFSF.
George Soros says the European debt crisis has the potential to be worse than the 2008 financial crisis that roiled markets worldwide. He says the problem is Europeans have no central authority to make decisions in a time of crisis.
“That is why the problem is so serious. You need a crisis to create the political will for Europe to create such an authority, but there is still no understanding as to what the authority will do.”
There is no policy coordination in Europe to tackle the problems and no political will to truly solve the problems. This is why I am so bearish on Europe. Germany is the linchpin to the bailout and their people don't want anything to do with bailouts which makes solving the debt crisis almost impossible. Merkel is going to lose the elections and Germany is going to drop out of the bailout. Then all hell is going to break loose.
Gold- Gold is down 4% today on who knows what. Its probably a bear raid, gold looks like a double top formation which could add downward pressure in the near term. I expect all dips to be bought however.
ZeroHedge speculates that central banks are intervening to stem the rise in gold prices.
"With further gains for the Swiss franc artificially capped (at least in the short term), it would be naïve to exclude the possibility of intervention in the gold market and a continuing strategic capping of the price."
This is the danger with gold. The gold price rising is basically giving the finger to central banks and policy makers. They hate gold and will do anything to stem its rise, including intervention.
Apple- AAPL is underperforming today in a great tape. AAPL is up less than 1% with only half the gains of the broader market. AAPL is still looking like a defensive play after yesterday's price action when it went up 1.5% when the broader market sold off.