Look Out Above, Twitter IPO Edition
The market began Tuesday with futures deep in the red, only to closed mixed -- the shallow pullback was apparently jumped on by investors. The anecdotes I keep coming across indicate that many professionals remain under-invested; perhaps this latest dip-buying is an attempt by some to get positioned for a possible year-end rally.
This morning, futures are pointing in the opposite direction (see above), and while I am loathe to correlate the randomness of markets with news headlines, please indulge my confirmation bias briefly as we look at some positives this morning:
The Tea Partylost big in Virginia, Alabama and New Jersey in the U.S. elections, suggesting their grip on the Republican party might be loosening -- the value of this is not in the politics, but in reducing the future possibility of a self-inflicted, unnecessary and expensive U.S. default. Yay, Treasury bonds.
Tales of Europe's demise have been greatly exaggerated, as Germany saw factory order rise 3.3 percent. A positive sign that "Europe's largest economy is benefiting from a recovery in the euro area and rising domestic investment."
Commodities Prices are rallying, suggesting that perhaps the demand recession some feared is not upon us. The caveat is that the U.S., the world's biggest oil consumer, continues to see weak demand for gasoline on fewer miles driven by consumers. Regardless, Crude oil has bounced off of its four-month low.
Last but not least, there is tremendous enthusiasm for the Twitter -- symbol: TWTR (first time I typed that) --initial public offering, the anti-Facebook offering, wildly oversubscribed and priced at the top of its range. Whether this means Animal Spirits have returned or not has yet to be seen -- but it does suggest that risk appetite has returned to the markets.
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Barry L Ritholtz at email@example.com