Italy's government passed an austerity budget which soothed investors concerns so stocks rallied once again. In fact, after a grueling week marked by extraordinarily high volatility again bulls were able to eke-out gains for the week. After Wednesday's immense rout you probably thought a positive weekly close was out of the question. Stocks did rally sharply on better news from the euro zone, better than expected Consumer Sentiment (64.2 vs pervious 60.9) and some good earnings from Disney (DIS) for example.
Italy's $2 trillion in debt exceed the combined debt of Greece, Ireland, Portugal and Spain combined per this Bloomberg article. While things "seemed" better Friday, markets are just buying time since these problems will be revisited again and again.
Nevertheless, as stated, stocks scored major gains to close the week higher. Further, major sectors were able to show positive gains for the year. No matter what they throw at markets, this is the season portfolio managers want to make their year. Since 2007 HFTs have been dominating conditions like never before. The algorithmic trading leaps into action on keywords from various news events. No one complains when they give a large assist when markets rise. As some remember, we've posted our HFT analysis examining this activity here.It was a light volume melt-up given the Veteran's Day holiday but they won't put that note on your brokerage statement. Commodity markets (precious metals, base metals and energy) were higher, while the dollar and bonds weaker. Given poor conditions, authorities and global central banks are choosing inflation as the preferred solution which will entail money printing. Volume was quite light and breadth per the WSJ was positive. You can follow our pithy comments on twitter and join the conversation with me on facebook. Continue to U.S. Sector, Stocks & Bond ETFs