Thursday, January 24, 2008

Market Adds To Yesterday's Rally In Early Trading

The market opened on a higher note this morning, following nice gains in Europe and Asia and several positive developments here in the U.S.

Jobless claims came in lower than expected at 301,000. This is well below the levels normally associated with a recession, which often run in excess of 450,000. Also, the White House confirmed its agreement on an economic stimulus plan that will provide between $300-$1200 to U.S. taxpayers.

The NYS Insurance Dept. said it is working on a plan to help out the ailing mortgage bond insurers.

China reported that its 4Q GDP growth was a strong +11.2%, calming fears of a global economic slowdown. This is helping boost those areas of the market tied to the global expansion. It is also helping oil, which is trading up to $88.

The 10-year yield is getting a huge boost this morning, rising 19 basis points to 3.61% as fears of an imminent recession subside (for the time being).

The Yen is down only slightly, and it would help this emerging rally if it continue to move lower. I suspect we have seen a pretty sharp unwinding of the global carry trade.

The bears are going to try to knock this market down at some point, so let's see if this rally can last into the close today. Also, it's time to start looking for stocks that have held up well during the decline, to see if we can identify which stocks might lead a further rally.


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