NEW YORK (ETF Digest) -- As noted in Tuesday's commentary, the trusty $NYMO (McClellan Oscillator) had signaled severely oversold market conditions. As a result, any shred of bullish news would spark a rally. Sure enough, on cue, Alcoa (AA) beat much reduced estimates and somewhere from the bowels of the ECB came the message they "might" be willing to buy "some" Spanish debt. Like I said, it wouldn't take much "might" and "some" language to get the bullish wave going.
Bread and Circuses is a metaphor for a superficial means of appeasement. It was the basic Roman formula for the well-being of the population, and hence a political strategy unto itself. It also coincided with the decline of Rome. From Wikipedia the definition continues: "It describes the creation of public approval, not through exemplary or excellent public service or public policy, but through diversion, distraction, and/or the mere satisfaction of the immediate, shallow requirements of the a populace." And who would argue this not being the current situation in our modern society and political leaders.
More serious news from Wells Fargo which forecast better new home sales which in turn bid up homebuilders (ITB) and others loosely linked to the sector. Who can qualify for new home mortgage loans has become a challenge. Nevertheless, this is the sector leading stock indexes higher Wednesday.
The Fed's Beige Book was released at 2 PM and indicated ongoing modest economic expansion. The previous employment report was not factored in and the report overall was as expected. Then it's no coincidence that the report was preceded and followed by all manner of Fed governors campaigning in support of Fed policies. Then later the government announced the budget deficit for March at $198 billion. This was little noticed since the Fed is now buying over 80% of the debt the Treasury is selling which puts officialdom at least in "Three-card Monte" territory. When you have a printing press you don't need a charge card. For Americans, as long as they can buy iGadgets, a car and go to the mall why should they care? These features are the highlight from the bread and circus environment we live in.Gold (GLD) was flat as was the dollar. Bonds (TLT) saw a little profit-taking and commodities (DBC) overall were mixed. Volume was nearly half Tuesday's heavier volume which continues the overall distribution trend. Breadth per the WSJ was positive perhaps undoing some short-term oversold conditions (see $NYMO chart). Join the conversation with us on twitter and facebook. SPY - The SPDR® S&P 500® ETF is a fund that, before expenses, generally corresponds to the price and yield performance of the S&P 500 Index. Our approach is designed to provide portfolios with low portfolio turnover, accurate tracking, and lower costs.
See more details IWM - The iShares Russell 2000 Index Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the small capitalization sector of the U.S. equity market as represented by the Russell 2000 Index. The index represents the approximately 2,000 smallest companies in the Russell 3000 Index.
See more details QQQ - PowerShares Capital Management LLC is passionate about our goal of delivering the highest quality investment management available through one of the more benefit-rich investment vehicles ever created, the exchange-traded fund. PowerShares QQQ¿, formerly known as "QQQ" or the "NASDAQ- 100 Index Tracking Stock®", is an exchange-traded fund based on the Nasdaq-100 Index®. The Fund will, under most circumstances, consists of all of stocks in the Index. The Index includes 100 of the largest domestic and international nonfinancial companies listed on the Nasdaq Stock Market based on market capitalization. The portfolio is rebalanced quarterly and reconstituted annually.
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