Daily Investment Interpretations

September 13, 2010

2010-9-13 (Monday) The markets rose smartly today. The NASDAQ Composite advanced 43.23 points (1.98%) to 2,285.71 The Dow enlarged 81.36 points (0.78%) to close  at 10,544.13, and the S&P 500 tacked on 12.35 points (1.11%) to end at 1,121.90. Oil moved up to $77.13 a barrel, while Gold ended the day at $1,246. The VIX dropped 0.78 to 21.21.
    I now know the reasons for last night's elevated stock futures. First, the Basel Committee on Banking Supervision announced that it would allow European banks 8 years to upgrade their banking reserves to new, higher levels: Bank rules stimulate bulls. Second, the European Union has upgraded its forecast for next year's GDP, GDP forecasts strengthen, from 1.0% to 1.7% for the year..Third, China has reported that it is experiencing a "goldilocks"--just right--recovery: China's soft landing
"'China's August production, consumption and inflation data signal that the government has largely succeeded in engineering a controlled deceleration of growth and prices without having the bottom fall out,' wrote Uwe Parpart, chief Asia strategist at Cantor Fitzgerald, in a note to clients Monday. 'China's apparent soft landing and re-acceleration in domestic demand growth ... are, of course, good news for the global economy and equities,'" said Parpart."
    Right now, at 1,122, the S&P 500 is almost at the top (S&P 500 = 1,128) of its four-month trading range. Will it break upward out of its four-month trading range? Or not? To me,
GDP forecasts strengthen sounds like strongly positive news. 
    Buffett dismisses double-dip fears, reports say. Maybe it's time to start listening to the Sage of Omaha. Berkshire Hathaway is up 23% so far this year.