The State of the Markets:
Bearish reversal? What bearish reversal? It turns out that Wednesday's market narrative made a mockery of Tuesday's hand wringing relating to a potential government shut down and the end of QE as we know it. So, cue the reversal of the reversal, or the dip buying, or whatever you'd like to call it. The bottom line is that one day after a 380 point reversal off the top, the blue-chip indices bulled their way to fresh all-time highs. Dilly Dilly!
If you find yourself shaking your head at this week's action or wondering how stocks, bond yields, and the VIX can all go up at the same time one day after what was purported to be an "important reversal," you are not alone.
P.S. Anyone who claims to have "called" today's move should be avoided like the plague. But I digress.
The key to my oftentimes meandering morning market missive is to identify the driving forces behind the market's movement. To be clear, we are NOT trying to pass judgement on the action, rather to try and understand why Ms. Market is doing what she is doing.
So, from my seat, Wednesday's joyride to the upside was triggered by a resumption of the "growth narrative" and was sponsored by our good friends at Apple (NASDAQ: AAPL).
To clarify, the current market narrative is a two-parter. First, it is becoming apparent that the trend in Corporate America is to use the tax benefits created by the new tax bill to spend money. On bonuses. On plants. On hiring.
And the second part is that the stock market has yet to "price in" the full effect of what is happening out there.
Exhibit A in this argument was Apple ...