Daily Investment Interpretations
November 24, 2008
The stock market continued its advance today, climbing 5%-to-6½ %.
Although I haven't seen any definitive commentary about it, I'm thinking
it could be optimism about the bold talk coming out of Team Obama, but it
may be something else entirely that's driving this rally. This may be a
bounce within a bear market.
The NASDAQ Composite rose 87.67 (6.33%) to 1,472, the Dow gained 397 (4.93%) to 8,443, and the S&P ascended 51.78 (6.47%) to close at 852 (up 100 points in two days). Oil rose to $53.65, and gold advanced to $819.50. The VIX fell to 64.70.
Update, 11-25-2008: As I pondered above, optimism about the bold talk coming from Team Obama has been cited as one of the causes of yesterday's rally, but another upbeat piece of news was the federal bailout of Citigroup, reassuring investors about how far the Fed will go to insure financial assets against losses. Paul Krugman is critical of this bailout, and David Weidner argues that We can't afford the Citigroup deal.
The good news is that homes in the West are selling better; the bad news is that banks are unloading them at fire sale prices.
One other piece of good news: the fall in energy prices has had a stimulating effect upon the world's economies.
As early as next week, the Big Three automakers are supposed to return to Congress with a detailed funding request, and with a plan to repay their loans.