The markets this week had two main drivers taking them up off floor.
Four to five times this week either a bond offering was canceled for “technical reasons” or someone came out and trashed Republican presidential front runner Donald Trump.
All of these events were good enough to send market soaring over 100 points each time.
Let’s take the “technical” problems first. Treasury cancelled or delayed two POMO bond offerings this week at the last minute. As a result of this action funds that were allocated for the offering had to find other assets to buy and in the course turned equities green.
The latest “Trump dump & bump” came Thursday midday came when one-time Republican presidential hopeful Mitt Romney questioned why Trump has not released his tax returns. Just hinting at something, anything. No charges that the returns would turn up something.
Well the Dow took off and closed +212 points from a slightly negative level prior to the announcement.
Trump’s rhetoric on trade — specifically with China — appears to be the crux of institutional money’s reluctance to get behind him.
But the bigger question is how bad the underlying economic news is that we are relying on canceled offerings and scurrilous political attacks to drive markets higher.
Certainly you can look for the latter to continue Friday and over the weekend leading up to Super Tuesday primaries.