Yesterday, the Dow rose 254 points. It was a perfect storm of sorts. The early morning economic report on consumer spending was surprisingly strong. There was breaking news that three Greek banks were merging, thinking that they would have better access to the market. (Today, they will look more like three drunks trying to hold each other up.) By the afternoon, there was a totally unconfirmed rumor on the floor of the exchange that the Obama Administration had developed a set of comprehensive reforms to breathe life into residential real estate, that bypassed the “do-nothing” Congress. All of this helped propel the stock market higher and higher.
However, the most beautiful thing heard on Wall Street yesterday was the Sound of Silence coming out of Europe. The auditors are on their way to evaluate how much progress the Greek government has made. There is no resolution to the demand of Finland for collateral on their portion of the bailout. Angela Merkel’s government struggles harder each day to hold together. But, yesterday, there was no bad news from Europe.
The U.S. economy is stronger than the stock market indicates, but it is very vulnerable to the European financial crisis. Globalization is not all good!
The futures market indicates the Dow will open today down about 60 points. Attention will start turning toward Friday’s monthly Jobs Report. The consensus forecast is that 65 thousand jobs were created in August. Of course, this number will be clouded by the Verizon strike and may not be as dramatic this month. That’s fine, as we don’t need anymore drama right now.