This week, the FOMC again did its part to feed the stock-buying madness by offering interest-rate support until the U.S. election is over. After all, we know “it’s the economy stupid.” The question is will voters buy the lie that a smoke-and-mirrors stock market signals a prosperous economy. It’s all they’ve got, so the powers that be will have to go with it.
Monday, stocks rose 0.7% in Asia, 1% in Europe, and 0.3% in the U.S. on low volume. Tuesday, stocks rose in Asia 0.5%. They closed virtually unchanged in Europe and closed up just slightly in the U.S. on low volume as investors waited to hear from the FOMC.
Wednesday, stocks shot up 1.9% in Asia, rose 0.4% in Europe, and powered 1.4% higher in the U.S. on light volume. The VXO plummeted 14% to close at 13.41 while precious metals gained 3% and their miners shot up 7%. The anxiously awaited FOMC announcement to kick the can again fueled much of this exuberance.
Thursday, stocks rose in Asia for the fifth straight day — this time 0.7%. They also rose in Europe and the U.S. — 1.6% and 0.8% respectively on low volume. The VXO fell 12% to close at 11.84, and the 10-Year U.S. Treasury Bond yield retreated 2% to close at 1.63. Friday, stocks took a breather from their relentless climb. In Asia they fell 0.4% and in Europe and the U.S. they declined 0.7% on low volume. Precious metals miners gave back 3%.