JANUARY 10, 2012, 10:11 AM
Is the Stock Market Breaking Loose?
You might be wondering what has gotten into the stock market this morning.
So far this year it has stumbled heavy-lidded through one low-volume, low-movement day after another, and then suddenly this morning it’s off to the races.
The answer is: Technicals! Sort of.
The S&P ended yesterday right below a key resistance level at around 1285 or so, and then this morning a bunch of stuff happened that pushed futures right through that level and beyond:
1. Alcoa, despite reporting a quarterly loss and cutting production left and right, said it expects an increase in aluminum demand this year, like a little fun prize inside a big box of Disappointment Flakes.
2. China reportedly will command every man, woman and child in China to pour all of their money into Chinese stocks (OK, we exaggerate for effect), lifting China’s stock market. Who even knew this was a thing that could be done? Your move, US government. There’s also speculation China is already easing financial conditions and will keep doing that to prevent a hard landing.
3. Fitch suggested France would probably keep its AAA rating. That’s probably not such a big deal at this point, given that the market already has cut France’s credit rating. And Fitch was not nearly so sanguine about Italy. But this is one less bad headline to worry about. Meanwhile, everything in Europe is coming up roses — European stocks and the euro are higher, and European bond yields are lower.