Global economic optimism spurs strong rally; Dow jumps 204

[Shadow]

Stocks rallied strongly Friday as data in China allayed concerns about a further slowing of global growth and banks (http://www.debatepolicy.com/#) advanced after JPMorgan released earnings.The Dow Jones industrial average closed the day up 204 points, while the tech-rich Nasdaq composite added 42 points. The day's rally erased the broader market's losses for the week.

Shares of JPMorgan Chase, the largest U.S. bank (http://www.debatepolicy.com/#), rallied after it reported a quarterly profit of nearly $5 billion despite bad derivatives bets (http://marketday.msnbc.msn.com/_news/2012/07/13/12720092-jpmorgan-profit-drops-on-whale-of-a-loss?lite) that resulted in credit trading losses of $4.4 billion.


The bank's profit defused concerns about the long-term impact of a multibillion-dollar trading losses in the quarter.

Data showed growth in China slowed for a sixth straight quarter to 7.6 percent, better than some in the market feared, but low enough to keep open the possibility that more action may be taken by policymakers.

Concerns about slowing growth have pressured stocks (http://www.debatepolicy.com/#), leading to a string of losses by the S&P so far this week.

http://marketday.msnbc.msn.com/_news/2012/07/13/12722302-global-economic-optimism-spurs-strong-rally-dow-jumps-204?lite

[Kathianne]

I can't help wondering how the 'investors' can ignore billions of basically being tossed by JP Morgan/Chase. I don't understand how they can be optimistic in the face of millions leaving the work force; taking potential billions of spending along with their decisions. I don't understand how the continuing racking up of foreclosures and bankruptcies bode well down the road. What about when 'easing' stops, it cannot be sustained even in the cyclical way they've been doing so? What's the plan of the government if inflation or deflation hit, likely with all the money floating around? If there isn't a plan by the government, where is the comfort that the investors suddenly feel?

[mundame]

Stocks rallied strongly Friday as data in China allayed concerns about a further slowing of global growth and banks (http://www.debatepolicy.com/#) advanced after JPMorgan released earnings.The Dow Jones industrial average closed the day up 204 points, while the tech-rich Nasdaq composite added 42 points. The day's rally erased the broader market's losses for the week.

[...]

Concerns about slowing growth have pressured stocks (http://www.debatepolicy.com/#), leading to a string of losses by the S&P so far this week.

http://marketday.msnbc.msn.com/_news/2012/07/13/12722302-global-economic-optimism-spurs-strong-rally-dow-jumps-204?lite


It's these wild swings that are worrying. Up, down, up, down, a hundred and two hundred points in a day. The market did that during the 2007 and 2008 financial crisis, too. Given the perilous data from Europe, every country being downgraded and can't borrow less than 6 or 7% even on 10-year sovereign bond....given the ever-sinking figures in the USA, WHY is the market going up wildly, down wildly, and back up?

I don't think it's a good sign.

[Dilloduck]

I can't help wondering how the 'investors' can ignore billions of basically being tossed by JP Morgan/Chase. I don't understand how they can be optimistic in the face of millions leaving the work force; taking potential billions of spending along with their decisions. I don't understand how the continuing racking up of foreclosures and bankruptcies bode well down the road. What about when 'easing' stops, it cannot be sustained even in the cyclical way they've been doing so? What's the plan of the government if inflation or deflation hit, likely with all the money floating around? If there isn't a plan by the government, where is the comfort that the investors suddenly feel?

Because they are not investors as they would be so eager to have us believe. They are nothing more than gamblers hoping they die "winners".

[logroller]

I can't help wondering how the 'investors' can ignore billions of basically being tossed by JP Morgan/Chase. I don't understand how they can be optimistic in the face of millions leaving the work force; taking potential billions of spending along with their decisions. I don't understand how the continuing racking up of foreclosures and bankruptcies bode well down the road. What about when 'easing' stops, it cannot be sustained even in the cyclical way they've been doing so? What's the plan of the government if inflation or deflation hit, likely with all the money floating around? If there isn't a plan by the government, where is the comfort that the investors suddenly feel?
Too big to fail....Foolish hope springs eternal. :dunno:

[taft2012]

When one considers how much of our budget (well, when we used to actually have budgets) goes towards paying interest on the national debt, all one needs to do is think of what will happen if once we can no longer hold our interest down so artificially low.

Paying the interest could double very quickly and where will we be then?

[Kathianne]

Too big to fail....Foolish hope springs eternal. :dunno:

I've been wondering about that lately. GM/Chrysler and the banks were all 'too big to fail," so far 3 major cities have not been, nor have we heard much about CA in general having a big problem. I mean after all, they just approved the first part of high-speed rail, right?

Well CA did just approve the high speed rail, over the objections of most of the citizens. IL, another state well on the way to bankruptcy also keeps spending money. One could argue that 'corporations' matter more than citizens to Washington, but that's not the answer either. Power matters to them. Money from the owners and campaign boots on the ground from labor unions. Not all states operate like a CA or an IL, lucky for them. When the citizens of those states start voting differently or leaving those states for more responsible ones, then changes will be made. Basically the same argument that pertained to autos and financials, they should have failed.