Stocks see no reason to waste the French crisis

“You never let a serious crisis go to waste. And what I mean by that it’s an opportunity to do things you think you could not do before,” Rahm Emanuel

It only took until noon for equity markets to figure that out.  Knowing that there will be no rate hike in Dec.

As the French massacre and Japan entering its 5th recession in the last 7 years hit, was digested equity analysts started telling the desks it’s a buying opportunity.

Yes Virginia, there will be a Santa Claus rally, but not for retailers. Since that money will not get to the hands of the consumer.

All of this does not take into account the tremendous fears in the corporate bond markets. There is no appetite for further issuance and much of the record amount of debt on the street is trading at near distressed pricing.

Debt trading at 70% of par is more than norm, with energy sector paper trading well below that.

This will need to be watched, since corporate debt market is many times larger than stock market capitalization.

Wal-Mart missed its revenue target this morning, but through financial wizardry beat on the bottom by a nickel on earnings per share. The largest retailer in the US said next quarter — holiday shopping time — to the low-end of the guidance.

This is the new normal for retail as the consumer is not feeling the recovery the Fed is attempting to jawbone into existence.


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