The stock market isn’t worried about Egypt. The stock market isn’t worried about anything, seems.
US stocks rally after another good reading on the manufacturing sector, pushing the Dow and S&P 500 back over key psychological and technical levels, and as the market decides Egypt’s big news just isn’t a disruption.
DJIA jumps 148 (1.2%) to 12040, back over 12000 S&P 500 rises 21 (1.7%) to 1308, back over 1300; those numbers have been targets for a while. Nasdaq Comp gains 51 (1.9%) to 2751. Crude slides 1.5%, as there haven’t been any disruptions to the global oil trade due to the Egyptian unrest.
ISM says the manufacturing sector had its best showing in nearly seven years. That’s all the bulls needed to hear.
Mubarak addresses Egypt in a national speech; says he won’t run for president again “for the good of the nation.” The immediate reaction from the people in Tahrir Square isn’t, shall we say, welcoming.
But Egypt is a world away from Wall Street. Here’s something I put on the wire early this afternoon:
BofA/Merrill’s David Bianco isn’t necessarily telling you to sell, mind you, but he notes today that the firm’s “Sell Side Indicator” held steady in January, and remains at its highest levels since May 2008. “The last time that Wall Street strategists were this bullish on equities was a few months before the collapse of Lehman Brothers,” he writes. But the indicator itself still remains in neutral territory, he notes. “Given the contrarian nature of this indicator, we take some comfort in the fact that Wall Street strategists are still recommending that investors should be underweight equities.”
It’ll take more than a million or so angry Egyptians, and Tunisians, and Yemenis, and Jordanians, and Syrians, and God knows who else, to knock this stock market off its stride.
Oh, and if you’re thinking, because we know you are thinking it, well, if the Fed stops buying all those Treasurys, that’d stop the rally, well, here’s the first, first hint that the groundwork’s being laid for QE3:
The Federal Reserve could debate extending its bond-buying program beyond June if U.S. economic data proves weaker than expected, Kansas City Fed President Thomas Hoenig said.
Another round of bond buying “may get discussed” if the numbers look “disappointing,” Hoenig told Market News International in an interview published on Tuesday.
Why end a good thing while it’s going strong, right?