Stock futures were up over 100 Dow points as of 10:30 PM PST. The euro was also up by more than half a percent.
French and Belgium officials also pledged to backstop the failing bank Dexia. Merkel and the European leaders pledged to do "everything necessary" to stem contagion from the crisis.
This week starts off the third quarter earnings season with Alcoa reporting after the bell Teusday. The earnings reports will go a long way to show the sustainability of the recent rally. Pepsico, JP Morgan, Google and Mattel all report earnings next week.
There had been 3 things that were bothering the market recently.
1. The European Debt Crisis- lack of coordination among policymakers has slowed response to the European Debt Crisis and called into question the viability of the euro as a common currency.
2. Recession in the USA- after the stock market volatility in August and September and the budget fiasco killed consumer confidence, everyone wondered whether we were headed back into recession.
3. Hard landing in China- China has been powering worldwide economic growth during this recovery but policymakers there are concerned with inflation and so are tightening monetary policy. Their efforts to throttle down growth has caused concern in the market that they will go too far killing demand for commodities.
Recently, 2 of these fears have been alleviated somewhat allowing the market to rally. The European policymakers finally seem to take the situation seriously and I believe Merkel and Sarkozy when they say they will do anything to keep the Eurozone together.
In the United States, economic data has come in better than expected easing fears that we are going into a recession. While the economy is not booming, it is definitely not falling off a cliff.
In China, economic data has also come in decent but inflation is a little hot. Commodity stocks and currencies have crashed recently because of this fear. It doesn't look like there will be a China hard landing but the jury is still out on this one.
Wow, what a day in the market's today! The Dow rose 330 pts and the SNP 500 rose even more on a percentage basis. Stocks were led higher by financial and energy and materials shares. A lot of the charts I posted on Friday had nice breakouts today which should lead to more rallying. Here is the SPY chart...
Now for the AAPL chart...
It is all systems go for now, next stop 1220 on the SNP.
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!