Global Markets soared today after a deal between EU leaders was struck last night to help recapitalize the Eurozone banks. While more, much more, still needs to be done this is a step closer to European Banking Union. The major caveat is that the monies for the banks might not be available for another year. All three major American Indices rose more than 2% on the day capping the end of the first half of 2012.
Year to Date all three indexes are up now more than 5%, while the tech darling Nasdaq has double digit gains YTD. With a lot of the gains coming from today alone.
YTD DOW Chart:
Today the DOW (INDU) closed up 278 points, 2.2%. The S&P 500 (SPX) finished up by 33 points, 2.5%. And the tech heavy Nasdaq (COMP) was up 86 points, 3%.
Today’s rally was multifaceted; partly due to the EU deal, partly due to extreme low expectations heading into to the EU Summit that we saw a lot of short covering – i.e. a short squeeze, and then it was the end of the quarter so we saw some “window dressing” which is when money mangers load up on hot stocks to show their clients they where in those stocks on their quarterly statements all though they really only bought the hot stocks in the last 15 minutes of trading of the quarter.
Expect to see very choppy trading over the next 3-months with extreme volatility with 100 point swings in either direction. As long as oil can stay low we should see decent earnings this next quarter. Although beware only best of bread will perform and anything less has a high chance of missing on both earnings and being forced to lower guidance.
The dollar fell against the euro due to the banking deal.
Oil rose $7.27 to close at $84.96 a barrel.
Gold had a good day rising $53.80 to $1,604.20 an ounce.
The 10-Year Note fell pushing yields up to 1.65%.