S&P Going For 6 Ouf Of 6
When Bloomberg blasts headlines like this: S&P FUTURES UP 1PT, AT SESSION HIGH, ERASE EARLIER 3.4PT DROP, you know Bernanke hasn't spoken in over 24 hours if a 4 point swing is headline worthy. That said, the exhausted S&P ramp is now going for the 6th consecutive session as all the losses since the June FOMC meeting have now been erased, the S&P is making constant all time highs, and seemingly the Fed's message on tapering and communication has been clarified. The message being that the Fed is tapering its monthly purchases but short-term rates aren't being lifted. Sadly, the market's first reaction was the right one but the herd of cats has once again been herded by the trading desk at Liberty 33.
And if the never-never land of US stocks continue merrily chugging along without a care in a centrally-planned world, China, after surging impressively in the past week on hopes, promises and rumors of speculation of a PBOC intervention, slumped after Finance Minister Lou Jiwei said overnight that the country’s expected GDP growth rate in the first half of this year will be slightly lower than 7.7%. He said that there is no doubt that China can achieve its growth targets, though the seven-percent goal should not be considered as the bottom line. In fact, he specifically mentioned that 6.5% would be tolerable.
Things were not so rosy in Europe either where as RanSquawk reports, the Iberian Peninsula was at the forefront of investors' minds today, with the I8EX-35 index over in Spain nursing losses of over 1% following reports that the Spanish government is to cut the regulated price of power distribution 20%, while the Portuigal-Germany spread widened further after the Portuguese government noted that the Troika has delayed their quarterly evaluation to late August. In fact, the spread just hit overnight wides following comments from the opposition that the country needs to renegotiate the terms of its bailout. As a result, utilities and basic materials under performed on the sector breakdown, with Spanish utility names such as Acciona, Enagas and Red Electrica trading down by over 6%. The contagion effect also meant that Italian stocks also underperformed their core counterparts, albeit to a smaller extent. Still, the ongoing dovish rhetoric by central bankers on both sides of the pond ensured that in spite of political tensions which also saw Builds 2000MA line cross the 50DMA line to the upside, stocks continued to march higher.