After the worst Thanksgiving week since 1932, the futures market indicates the Dow will gain about 230 points at the open.  This impressive turnaround is due to several things.  First, holiday sales in the U.S. appear to be remarkably strong.  Second, Sarkozy and Merkel are talking about a “second European Union” that can coordinate fiscal policy and move more quickly.  Third, there was an unconfirmed rumor that the IMF was bailing out Italy, which made absolutely no sense and was subsequently denied by the IMF.

Once again, it illustrates that the U.S. economy is trying to dig its way out of the last recession and that we will go back into recession only if Europe pulls us into it.

Our stock market is reflecting hope out of Europe, which I expect will be temporary.  The only way to kill bond vigilantes is with a bazooka, and this piecemeal approach just irritates them.  The more we isolate our economy from Europe the better.

The big news this week will be the monthly Jobs Report on Friday, when we expect to see about 125 thousand jobs were created, after a continued loss in government jobs.  Anything better than 125 thousand will move the market higher.  Keep your fingers crossed!