The big market mover was China denying the BS story out yesterday that it was going to dump Euro-bonds, which would hit and hurt the euro. Regular readers might recall this was my point of view yesterday.
Economist Dr Shane Oliver from AMP agreed with me on my Sky News Business Channel program last night that the Chinese are pretty good at economic policy. They were the first to go for stimulus when the GFC threatened to create a Great Depression Mk II.
The Dow was up 2.85 per cent, the S&P 500 put on 3.29 per cent while the Nasdaq surged 3.73 per cent.
In the news
On the economic front there was an employment report that was not better than expected. And US GDP growth was also a little worse than tipped — it increased at an annual rate of three per cent in the second estimate for the first quarter — but economic statistics never do exactly what's expected.
A good sign for the belief in the US economic recovery was the support for retail stocks with Costco reporting quarterly profit of 68 cents a share which was a great sales as well as healthy consumer indicator.
Even Tiffany’s profit results sparkled like its famous diamonds.
Other good indicators apart from fear subsiding was oil beating the $US74 a barrel level and the Oz dollar breaking the 85-US cent benchmark.
Don’t get comfortable
We are not out of the woods yet as this correction could reassert itself. There are twitchy investors out there along with smart Alec hedge fund operators and then there are short-sighted politicians with big mouths and small brains who could easily derail this bounce-back.
However, let’s be grateful for small and overdue market mercies.
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