We're seeing some very interesting changes in U.S. market reactions to events in Europe,...


We're seeing some very interesting changes in U.S. market reactions to events in Europe, observes Jack Bouroudjian. Banks not only rebounded today "in the wake" of the bad news in Europe, but equities in general also moved up in the face of a weaker euro for the first time in months. Bouroudjian says to keep an eye on this decoupling, because it will be "a real good tell" for the course of the markets over the next few weeks. (video)
Comments (17)
  • det9
    , contributor
    Comments (50) | Send Message
     
    Decoupling!! Huh.....Is it too early to making these type of judgements...Lets wait for couple more weeks atleast. Are the "bulls" going to run that far...
    5 Jan 2012, 08:47 PM Reply Like
  • untrusting investor
    , contributor
    Comments (9903) | Send Message
     
    The bullish chatter is reaching fever pitches now from almost everywhere. A contrarian might just think the big boyz are trying to ramp prices up for awhile to build short positions.
    5 Jan 2012, 09:38 PM Reply Like
  • anonymous#12
    , contributor
    Comments (545) | Send Message
     
    Untrusting, I really laugh at how CNBC and the media portrays the 9% unemployment rate as things getting better.

     

    What those pay shills of the banking oligarchs don't want to say is that the labor participation rate keeps dropping. That the BLS reports unemployed people out of work for a long time as "not searching for work" and doesn't counts them for the U report.

     

    And of course, the jobs being created right now are low paying jobs in the service sector.
    5 Jan 2012, 09:47 PM Reply Like
  • The Geoffster
    , contributor
    Comments (4291) | Send Message
     
    Drastic cuts in military spending is not a smart move if you're trying to maintain hegemony and your reserve currency. Better to cut the crony capitalism and social welfare spending. The military can take care of any civil unrest.
    5 Jan 2012, 09:22 PM Reply Like
  • anonymous#12
    , contributor
    Comments (545) | Send Message
     
    You have too much money sloshing around the bank oligarchs. They need to make a return.....so equities going up isn't the surprise. The surprise is how weak are the rallies in such a low volume environment.
    5 Jan 2012, 09:25 PM Reply Like
  • EMS
    , contributor
    Comments (586) | Send Message
     
    This is problematic for the realists/ skeptics. Guess you can't do much on the short side for now without risking huge losses. Setup is for big, big pain.
    5 Jan 2012, 09:57 PM Reply Like
  • mike mohr
    , contributor
    Comments (452) | Send Message
     
    Who is stupid to get into this rigged market?
    Low volume, manipulation only feeds the squid.
    5 Jan 2012, 10:10 PM Reply Like
  • Windsun33
    , contributor
    Comments (4431) | Send Message
     
    So stay out, nobody is forcing you to buy anything.

     

    But rigged or not, I have made over 13% since Jan 1. Mostly in cash now so don't much care what it does, in fact hoping for a good dip to buy on. Of course that will be rigged also according to you I suppose
    6 Jan 2012, 01:03 AM Reply Like
  • Bear Bait
    , contributor
    Comments (926) | Send Message
     
    Shorting bank stocks isn't producing much these days....so let's dump the bank shorts and start buying crude contracts just in case Iran does shut down the gulf of Hormuz. It seems investor memories are short, the time is quickly approaching when investors won't give a rip about the Euro debt crisis just like they have about everything else. "Decoupling" The market/Bulls have wanted to rally upward for months now. If the nonfarms are over the top like some believe they will be, it could be the excuse for a 2 to 3 hundred point run up tomorrow.
    5 Jan 2012, 10:46 PM Reply Like
  • 737Flyer
    , contributor
    Comments (2) | Send Message
     
    Well I am 100% short and have been since end of November.....burn baby burn....I need to get back to even. This is a massive credit event and the divergence of some major classes is crazy....I don't think it is decouple yet. Something will break soon hopefully next week. This short is painful this time.
    5 Jan 2012, 10:48 PM Reply Like
  • Tack
    , contributor
    Comments (16281) | Send Message
     
    So many clueless comments, welded to pessimism. Europe? Unemployment? CNBC? Does anybody writing this stuff pay any attention to actual reported data?

     

    The retail data, despite a few misses, was superb from the major firms reporting, beating estimates by substantial margins. The jobs data was startling, even if BLS data will be less than ADP. In particular, the pickup in the construction industry is very ominous for doomsters. Banks and financials are beginning to make moves. Even Germany beat it's consensus.

     

    It seems that the better the data gets, the more disbelieving and raucous the doubters become, thereby further ensuring being on the wrong side of the trade.
    5 Jan 2012, 10:52 PM Reply Like
  • nightfly
    , contributor
    Comments (1015) | Send Message
     
    I find it interesting that so many are giving credence to the typical holiday ramp in equities and the also seasonal "better numbers around the world".

     

    Only if these "superb" numbers continue through the non-seasonal bumps will they mean anything.

     

    As for housing? Well, the only building going on is for residential rentals. Been down so long...

     

    Follow FX it always lead and equities eventually follow: AUD/JPY is the best tell.
    6 Jan 2012, 12:50 AM Reply Like
  • Windsun33
    , contributor
    Comments (4431) | Send Message
     
    Actual data is a tool of the informed. Others prefer wild theories of manipulation, market fixing by TV pundits, and banker conspiracies.

     

    That said, I don't believe the jobs data will last. It looks like at least 300,000 of those jobs were mainly holiday temp hires, and I expect the UI rate to go back up to around 8.8% in the report for Jan.
    6 Jan 2012, 01:09 AM Reply Like
  • Hans Siegfried
    , contributor
    Comments (20) | Send Message
     
    People may have started to talk about being bullish, but I'd bet that when it comes to actual money, most people are still scared and on the sidelines. Cash is the crowded "trade" right now, not equities.
    5 Jan 2012, 11:17 PM Reply Like
  • Windsun33
    , contributor
    Comments (4431) | Send Message
     
    Midterm (3-12 months) for 2012 I think it will be very good for most stocks. However, I do expect a large but short term dip in Feb.. A lot depends on what happens in the upcoming earning season.
    6 Jan 2012, 01:13 AM Reply Like
  • The Last Boomer
    , contributor
    Comments (1054) | Send Message
     
    The correlation between Euro and SPX is currently breaking down but this is not the first time it has happened. The correlation breaks down every December since 2008. It was zero in August 2011 but then it bounced back to .97 in October. This correlation is rather volatile with pronounced seasonal patterns. We had inverse correlation in Feb-Apr 2010 when the market rallied while the euro fell. The correlation broke down in August this year when the market plunged but the euro did not move much. It is breaking down right now with the dollar and the stock market going up together.
    5 Jan 2012, 11:20 PM Reply Like
  • Richard93
    , contributor
    Comments (812) | Send Message
     
    Just remember Europe has not gotten on the road to prosperity yet. Spain and Italy will need to prove they are moving in the right direction for months. To prove they get it and are fixing the long term problems in there economies for good.
    6 Jan 2012, 12:22 AM Reply Like
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