December 13, 2011 at 09:32 AM EST
Better News From Europe & U.S. This Morning!
Tuesday, December 13, 2011. 9.25 a.m. The market volatility has been on an even shorter cycle recently, not week-to-week but day-to-day. The Dow was up a total of 176 points the first three days of last week, then down 198 points Thursday, back up 186 points Friday, and back down 162 points yesterday. That’s a [...]

Tuesday, December 13, 2011. 9.25 a.m.

The market volatility has been on an even shorter cycle recently, not week-to-week but day-to-day. The Dow was up a total of 176 points the first three days of last week, then down 198 points Thursday, back up 186 points Friday, and back down 162 points yesterday. That’s a total of 360 points to the downside and 362 points to the upside, but leaving the Dow right where it was six days ago.

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Obviously, that’s because the information and analysis regarding Europe seems to change day-to-day.

This morning there have been several pieces of good news so far.

The eurozone’s bailout fund, the European Financial Stability Facility (EFSF) held its first auction of short-dated bonds this morning and it was well received by the market, with solid demand and a 3.2 bid-to-cover ratio. And their cost was also encouraging, the yield averaging 0.22% less than France’s bonds on the same maturity.

And the outlook for Germany’s economy improved. The closely watched ZEW Confidence Index rose in December after declining for nine straight months. That has analysts backing off from expectations that Germany’s economy is sliding into recession.

In the U.S., economic forecasts are being revised higher for the first time this year.

Macroeconomic Advisors raised its forecast for 4th quarter growth from 3.5% to 3.7%.

Goldman Sachs revised its forecast dramatically higher, from just 2.5% two weeks ago, to 3.4%.

Nomura Global Economics raised its forecast from 3.7% to 3.9%.

It looks like the better news items will have the day-to-day market volatility back to the upside today.

It won’t come any too soon for global markets outside the U.S., which have not been holding up as well as the U.S. market.

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Well, I have a lot more to say, and more charts to show you, but I’ve run out of time if I’m going to get this posted on schedule.

To read my weekend newspaper column ‘It’s Small-Stock Sweet Spot Time!’ Click here.

Subscribers to Street Smart Report: In addition to the charts and analysis in the Premium Content area of this blog, there will be an in-depth U.S. markets update in the subscriber area of the Street Smart Report website tomorrow.

Yesterday in the U.S. Market.

The market changed its mind. On Friday it liked what it heard from the EU summit, and the Dow closed up 186 points. Yesterday, after European markets changed their minds and closed down, the U.S. market also decided it didn’t like the summit results after all, and the Dow closed down 162 points.

It was on low volume of only 0.8 billion shares traded on the NYSE.

The Dow closed down 162 points, or 1.3%. The S&P 500 closed down 1.5%. The NYSE Composite closed down 1.9%. The Nasdaq closed down 1.3%. The Nasdaq 100 closed down 1.1%. The Russell 2000 closed down 1.6%. The DJ Transportation Avg. closed down 1.0%. The DJ Utilities Avg closed down 0.9%.

Gold plunged $45 an ounce to $1,668.

Oil closed down $1.75 at $97.77 a barrel.

The U.S. dollar etf UUP closed up 1.0%.

The U.S. Treasury bond etf TLT closed up 1.3%.

Yesterday in European Markets.

Markets in Europe closed down yesterday, no follow through to their initial positive reaction on Friday to the EU summit. London closed down 1.8%. The German DAX closed down 3.4%. France closed down 2.6%.

Asian Markets Closed Down Last Night.

The DJ Asia-Pacific Index closed down 0.9%, following the declines yesterday in Europe and the U.S.

Among individual markets last night:

Australia closed down 1.4%. China closed down 1.9%. Hong Kong closed down 0.7%. India closed up 0.8%. Indonesia closed down 0.7%. Japan closed down 0.8%. Malaysia closed down 0.1%. New Zealand closed down 0.2%. South Korea closed down 1.9%. Singapore closed down 0.6%. Taiwan closed down 0.8%. Thailand closed down 0.3%.

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Markets This Morning.

European markets are bouncing back some this morning. The London FTSE is up 1.0%. Germany’s DAX is up 0.8%. France’s CAC is up 0.2%.

Oil is up $0.64 a barrel at $98.41.

Gold is up $1 an ounce at $1,669 an ounce.

This morning in the U.S. Market:

This week will be a quite heavy week for potential market-moving economic reports, including Retail Sales, Consumer Price Index, Industrial production, and the Fed’s FOMC meeting. To see the full schedule of the week’s reports click here, and look at the left side of the page it takes you to.

There were no reports yesterday.

This morning’s reports were that the Small Business Sentiment Index rose 1.8 points in November to 92.0, the third straight monthly improvement in small business optimism. And that Retail Sales were up 0.2% in November, not as strong as the 0.6% increase in October, and not as positive as the consensus estimate of a gain of 0.5%.

Still to come is the Fed’s announcement at 2:15 this afternoon after its FOMC meeting ends.

Our Pre-Open Indicators:

Our pre-open indicators are pointing to the Dow being up 60 points or so in the early going.

To read my weekend newspaper column ‘It’s Small-Stock Sweet Spot Time!’ Click here.

Subscribers to Street Smart Report: In addition to the charts and analysis in the Premium Content area of this blog, there will be an in-depth U.S. markets update in the subscriber area of the Street Smart Report website tomorrow.

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I’ll be back Thursday morning with the regular Thursday morning post, at 9:25 a.m. (This blog appears every Tuesday, Thursday, and Saturday morning!).

**** End of Today’s post*****

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