If you take a look at the stock markets today, you’re going to be in for a treat when you see some pretty big green numbers next to your favorite indexes.
And if you had to take one big swooping guess as to why the stocks rebounded so strongly today, what would you say?
I’ll give you a couple hints.
It has nothing to do with the NBA draft.
It has to do with something that happened overseas.
It has absolutely nothing to do with these cute polar bears playing in the snow, but I felt compelled to show it to you nonetheless.
If you guessed the “breakthrough” deal in Europe to help the struggling Eurozone breaks, then email me with your name and address and I will send a gold star with your name on it to your doorstep.
In a move that some financial big-wigs are calling a “not good but not bad” change, the European Union summit in Brussels today closed with relaxed payment conditions for Spanish banks and the possibility to lower the bar to aid Italy, along with a proposed $149 billion economic-growth plan for the region.
A move like this was bound to start a ripple effect in the market realm because our stock markets are so dependent on what happens overseas. Any time you get the slightest amount of optimism from Europe, stocks rebound. It’s a story as old as time.
But today was different.
At the time of publication, the Dow Jones Industrial Average climbed close to 250 points (1.91%), the Nasdaq Composite jumped nearly 80 points (2.74%), and the S&P 500 skyrocketed almost 30 points (2.15%).
Let’s talk about the Nasdaq Composite real quickly – this is scheduled to be the biggest trading day in 2012 for the Nasdaq Composite and pushed the year-to-date gain to 12.37%.
This definitely provides some positive momentum rolling into the third quarter, but optimists like myself know that with positive market news, there is always reason to believe that we’re holding on to some fool’s gold here.
Take a look at this article from CNBC with reasons not to trust today’s rally. While I do agree with most of his points, I have an issue with him saying Europe is still a reason not to trust today’s rally.
Isn’t today’s rally directly attributed to Europe?
I know that Europe isn’t fixed yet and I know that it’s an uphill battle, but if a quick hit like today’s EU summit can make stocks skyrocket, clearly Europe is on the way to better days.
Regardless, rejoice in today’s gains and let’s see where the future takes us. It could be a bumpy road.