Daily Investment Interpretations

November 3, 2011

2011-11-3: (Thursday Night): U. S. stock market indices soared today on a rate cut by Mario Draghi, the new chief of the European Central Bank, ECB delivers surprise rate cut in Draghi’s debut,  and indications that the Greek referendum won't be held after all: Greek referendum in doubt, Stocks Soar as Greek Referendum Unlikely. NASDAQ Composite regained 57.99 points (2.2%) points  to close at 2,697.97. The Dow rocketed  208.43 points (1.76%) to 12,044.47; the S&P 500 surged 23.25 points (1.88%) to settle at 1,261.15. Oil rose to 94.14; gold advanced to 1,765. The VIX dropped 2.24 points to 30.50.
    I said last night at bedtime: "
Market futures are down more than 1 % tonight. Things look dour." And they did, but that was before (1) the rest of Mr. Papandeou's government rebelled against him in the matter of a referendum: Greek Finance Minister Says No Referendum; Papandreou Backs Off Vote Pledge, Party Members Revolt Against Papandreou; Referendum, PM's Future In Question, BBC Says Greek Prime Minister Papandreou To Resign, and (2) the new head of the ECB revealed his position on the role of the ECB: namely, that unlike his predecessor, Jean-Claude Trichet, whose priorities were limited to the sole ECB mandate of reducing inflation, Dr. Draghi is concerned about the survival of the Eurozone: Draghi: the new sheriff in Frankfurt. (Unlike the U. S. Federal Reserve, which is tasked with holding down both unemployment and inflation, the ECB has the sole mandate of minimizing inflation.) Most important of all, this sends an upbeat message regarding what we can expect for the future.
    Mr. Market keeps his head up  Kevin Marder notes that the markets  held up well under yesterday's onslaught, and that they look as though they want to go up.
    2008's hazards are still with us (video)  This says that although banks are better-capitalized than they were in 2008, they're still in the crosshairs for a super-Lehman-Brothers moment if Greece outright (100%) defaults.
    Rex Nutting reminds us that Full employment is 12 years away
    Big profits, zero taxes for large U.S. companies 
    State of the Markets contributions for today include:  
    Technical Talk: Three Quick Takeaways From the Charts  This article, by David Moenning, expresses his frustration over the headline-driven high-frequency trading that drives the markets willy-nilly aimless, like tail-less kites. He explains elsewhere that you have to have a supercomputer, a technical staff of Ivy-League Ph. D. "quants", and an address near the New York Stock Exchange to play the high-frequency trading game.    
    Market Mover: AP Reports Greek Referendum Has Been Scrapped  
    Weekly Jobless Claims Fall 9,000; Fall Below 400K   
    Worker Productivity Rises; Unit Labor Costs Show No Inflation 
    In Surprise Move ECB Cuts Interest Rates  
    Bloomberg Consumer Comfort Index Falls Again
    ISM Non-Manufacturing Index Pulls Back in October  
    Factory Orders Improve in September  
    Retail Sales Disappoint in October  

    For some reason, U. S. market futures aren't available, but overseas stocks are up tonight.