A massive rally in US equities today led by financials as there was relief that Europe will be bailing out the sovereign debt of some of their members, and most importantly of all, the large European and US banks.
The US GDP came in well. Intraday commentary was provided, and it was a hollow victory as household income continued to decline.
I think the stock rally may have more to go, but it might take QE3 to take it much higher into year end. And if we do get QE3, we then go into bubble watch as financial assets inflate at the expense of the real economy.
This is what happens when one applies monetary stimulus to a broken economy.
