If, as the Fed and WS pundits assert, the economy is growing and even employment is improving, why continue POMO operations? This is hard to understand unless the Fed is just willing to tolerate another bubble for stocks. So, with all systems go another round of POMO commences with nearly $9 billion of bonds monetized. Some suggest another $25 billion in excess weekly liquidity will push stocks higher. This is the admitted Fed goal--higher stock prices.

Once again the DJIA raced higher Monday on ultra-light volume led by the usual suspects for a price-weighted index: IBM, CAT, BA and AA. The NASDAQ followed led by AAPL and semis like INTC.

The dollar fell, gold rallied modestly and crude oil dropped on Saudi threats to increase supplies.

Volume on this renewed melt-up was ultra-light with SPY barely exceeding 100M shares. Breadth per the WSJ was positive.

Continue to U.S. Sectors, Stocks & Bonds

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