Market Summary

I wondered in the premarket if solid results from the financial sector as they report earnings this week would start a new leg up in the market; at least for today we got an answer. With a positive outlook on Bank of America and an upgrade on Goldman Sachs by Meredith Whitney, financials led the market to its best day in a while. Green flooded with street, while at the closing bell, all 3 major averages were solidly positive. the Dow Jones Industrials rose 185.16, or 2.3 percent, to 8,331.68. The Standard & Poor’s 500 index jumped 21.92, or 2.5 percent, to 901.05; the S&P’s best day since June 1. The Nasdaq composite index rose 37.18, or 2.1 percent, to 1,793.21.

Despite the rare jolt in equity prices, energy prices stayed below the $60 a barrel mark. Benchmark crude for August delivery fell 20 cents to settle at $59.69 a barrel on the NYMEX as demand over the holiday weekend, usually the highest price mark of the year, saw little action. Prices have fallen roughly 19% since its peek 2 weeks ago.

That’s a lot of Zeros

The U.S. deficit for the fiscal year topped $1 trillion for the 1st time in history. To put that into perspective, that’s $1,000,000,000,000…

The imbalance is intensifying fears about higher interest rates and inflation, and already pressuring the value of the dollar. There’s also concern about trying to reverse the deficit by reducing government spending or raising taxes — in the midst of a harsh recession, a no no in almost any economic circle. We better have a robust recovery at some point to pay for this!
However I ask you, after all this spending, aren’t rates at or near all time lows? Isn’t the dollar index at a higher level than before last spring? It’s about expectations, but expectations change as variables do.

And Off to Jail We Go

Our pal Bernie is off to federal prison in Butner, NC, where he is sentenced to spend the next 150 years. I’m taking bets, how long does he last? I would say a good over/under must be around 4 years before he calls it a day…