Monday, November 26, 2012


Friday’s 1.3% rally in the S&P 500 (along with comparable jumps in other stock markets around the world) was triggered by good news out of Germany. The Ifo economic institute's closely watched business climate index rose to 101.4 in November from 100.0 a month earlier. That’s after falling for six months amid the euro zone's debt crisis. It defied expectations of a renewed downturn in November as both the assessment of current conditions and business expectations for the coming six months recovered.

The improvement was led by wholesalers (from -3.2 to 4.9), retailers (from -5.8 to -0.6), and construction (from -11.8 to -7.5). The outlier was services, which fell from 9.1 to 8.5. This is consistent with the latest readings from Markit’s survey of German purchasing managers.

Today's Morning Briefing: (1) Is the correction over already? (2) Bears should think twice. (3) A yearend rally to a new 2012 high? (4) Is it the season or the fundamentals? (5) A series of relief rallies. (6) Consumer Discretionary stocks take the lead again. (7) Good news out of China, Germany, & US. (8) China’s PMI back above 50. (9) Germany’s Ifo upticks. (10) US real GDP could be revised closer to 3% during Q3. (11) “Life of Pi” (+ +). (More for subscribers.)

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