Letter to Occupy Wall Street: Please Keep Protesting; it's Bullish for Stocks
It's day number 42 of the Occupy Wall Street Protests. Yesterday morning, a tired, groggy, bitter protester popped out of his tent exclaiming, “That's right, we're still here!”
Wonder if that individual heard about what the European debt deal did to the financial markets? Doubtful...
But, in case you haven't heard, the 1% got even richer as bank stocks soared.
France's president, Nicolas Sarkozy, announced plans to bail out Greece's creditors and stock markets responded crazily.
The wild spikes in financial markets quickly spread around the globe; from Asia, to Europe, and into the U.S.
The ironic part of the whole ordeal?
Despite the fact that the Occupy movement has been blowing up headlines for the past month-and-a-half, this October marks the best October ever for the Dow Jones Industrial Average in the past 115-years of its existence -- up more than 11%. The Dow INDU hasn't seen gains like this since back in 1982, when the Dow gained a 10.7% return.
The stock market’s impressive rally in recent weeks has confirmed the wisdom of those advisers who, in early October, urged investors to get a jump start on the so-called Halloween Indicator. That indicator, of course, is based on the stock market’s seasonal pattern to turn in its best returns between Halloween and the subsequent May Day. Their advice is motivated in part by the growing popularity of this indicator, which means that more and more investors are jumping the gun and not waiting until Halloween to get back into the stock market.
News of another bailout in Europe helped out Goldman Sachs & Co., J.P. Morgan Chase & Co., Morgan Stanley, and even the recently struggling Bank of American Corp. All of their shares spiked yesterday. That's right; the rich got richer.
This morning J.P. Morgan and Morgan Stanley suffered moderate losses.
A global rally in stocks always feels good because it contributes to the optimism that can help companies decide to invest to grow, which can help create jobs, which is what the economy really needs to fully recover.
But there is an empty feeling to this one — a feeling that another bullet has simply been dodged, that nothing has truly been solved or, certainly, fixed. It takes a crisis to really generate change. Hard to do when everybody’s making money.
Nonetheless, as the Occupy movement reveals, not everyone is making the money they'd like to be. The so-called 99-percenters are standing their ground, rallying for reforms to clean up Wall Street and jumpstart the "dying" middle class.
Meanwhile, some experts are simply calling this European debt crisis solution as little more than convoluted. Rather than solve an ongoing debt crisis, it may only get the European markets throught the holidays, prolonging its "day of reckoning."
*Indented excerpts from Market Watch.+11
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