(As of 7:20 am PST)
It appears a risk-on scenario
is in play this morning as the Dow Jones Industrial Average surpassed its
all-time high in early trading. Asian
markets rebounded from yesterday’s drumming with the Shanghai Composite index
bouncing back 2.3% after falling 3.7% on Monday. China’s outgoing Premier Wen Jiabao announced
to the new People’s Congress a growth forecast for 2013 at 7.5%, in line with
expectations. The buying spilled over
into Europe with broad gains on all major indices of 1%-2%. European investors were surprised to the
upside with positive retail sales data while looking ahead to an expected rate
cut by the European Central Bank in its meeting Thursday. Meanwhile, Wall St. is adding to gains seen
Monday with all 3 major indices higher.
There were no “Dow 10,000” hats on the trading floor to celebrate the
indexes break through an all-time high, yet the rocky climb back to these
levels was worth reflecting on. Adding
to the rally was a positive reading of the ISM services report which showed
expansion in the services sector for the 39th straight month. Commodity prices are higher in this risk-on
trading day, with markets likely to hold its gains as the day progresses.
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