1. Moving the Markets
As I was scanning the early news on MarketWatch, I cam across the headline “Wall Street gains as weak data spurs stimulus,” which was later removed and replaced with “Wall Street surges as data points to economic recovery” confirming that according to MSM bad news is good news and good news can be great news—all at the same time.
However, nothing mattered, despite the worst global macro data in some 4 years as timely verbal assists about possible interventions from ECBs Draghi and NY Fed President Dudley lit some fire under the major indexes.
That was enough and March came in like a bull in a China shop for with U.S. stocks up sharply adding fuel to an early rally on China’s latest stimulus move. All major indexes gained more than 2.1%.
The initial boost came after China freed more money for lending by lowering the amount commercial lenders must hold in reserve in a move to shore up slowing economic growth. I can’t see how this would be a good thing given the massive amounts of non-performing loans in the system other than to lift the stock markets temporarily.
Domestically, bank and tech stocks led the charge. Bank of America (BAC) rose 5% to $13.15 and JPMorgan Chase (JPM) gained 4.3% percent, to $58.72, pacing the gains among financial stocks.
Shares of Valeant (VRX) took a hit today. The company is under investigation from the SEC, but they are denying suggestions from a short-seller that they used Philidor and other specialty pharmacies to commit accounting fraud.
Breakthrough drugs generally attract investors’ attention in the pharmaceutical industry although generics make up bulk of the sales in most geographics. Average life expectancy is rising, thanks to the wonders of modern pharmacology, and pushing consumers toward generic versions of expensive brands for cost reasons.