Helicopter Euphoria

Monday, stocks shot up 2.1% in Asia as hope sprang eternal that Bernanke’s visit would give the kamikaze twins Abe and Kuroda just the confidence that they need to do more. The euphoria carried over into Europe where stocks gained 1.5% and even in the U.S. up 0.6% and catapulting stocks to nose-bleed levels and the S&P 500 Index to a new record on low volume. The 10-Year U.S. Treasury Bond yield shot up 5% to close at 1.43. As murder, mayhem, chaos, and insurrection erupts in major cities around the world all of this giddy glee in the stock market seems a bit out of step.

Tuesday, the NASDAQ closed over 5000, and the Dow and S&P 500 indicies set new closing record highs. With the economy floundering, what’s pushing stocks higher now besides corporate buybacks? Here’s your answer.  Stocks in Asia rose 1.2% and 1.1% in both Europe and the U.S. on moderate volume. The 10-Year U.S. Treasury Bond yield shot up 6% to close at 1.51 while precious metals fell 2% and their miners lost about twice that amount.

Wednesday, stocks rose 0.5% in Asia. Could it be that the Bernanke helicopter money for Japan euphoria is losing steam? Stocks in Europe actually lost ground by 0.3%. In the U.S. stocks stalled but still managed fractional positives for the the Dow and S&P to allow crowing over new closing highs on low volume. The 10-Year U.S. Treasury Bond yield gave back 3% to close at 1.47 while precious metals rose 2% and their miners gained about twice that amount.

Thursday, stocks rose worldwide: in Asia and the U.S. 0.5% and in Europe 0.9% on light volume. The 10-Year U.S. Treasury Bond rose 4% to close at 1.53. To add more weight to the froth, IBM closed above 160 and both the Dow and S&P indices set fresh new closing highs. Friday, stocks rose 0.7% in Asia, fell slightly in Europe, and changed little in the U.S. on moderate volume. The VXO fell 5% to close at 11.68 while precious metals and their miners slipped about 1%. The 10-Year U.S. Treasury Bond yield rose 4% to close at 1.59.

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