The Bounce
Stocks have staged a strong 8% bounce from the drubbing they took a short while ago because… I can’t really finish that sentence because I don’t really know why aside from the fact that the market was deeply oversold. Aside from the odd datapoint such as Durable Goods Orders, the economic data has remained miserable.
However, I do think that Warren Buffett’s $5 billion injection into Bank of America (BAC) significantly changed market sentiment towards financials, which were the pariahs of the market and led every downturn. Now they are among the strongest performers on the up days. Digging deeper though, it appears that Bank of America really did need more capital even though CEO Brian Moynihan kept assuring the public that wasn’t the case. It was a bonanza for Buffett and ended up being expensive capital for BAC.
Jobs And Jobs
The first Jobs refers to the Employment Report due out this Friday. Expectations are dismal and some are predicting an outright loss of jobs, but it’s hard to say that scenario is priced into the market given the huge bounce lately. I would think a negative print on that number would send stocks back into a tailspin.
The second Jobs refers to ex Apple (AAPL) CEO Steve Jobs. The stock has been performing well since he resigned which shows that his departure was priced in and that investors have faith that the building blocks are in place in Cupertino to continue the amazing innovation station that Jobs created. Of course Jobs is still in the picture, which doesn’t hurt either.
It will be interesting to see how much Jobs still gets to put his two cents in. He is a brilliant genius, but also has a big ego. If Tim Cook goes in a different direction than he would want, I am wondering what Jobs would say. Judging by the stock action, it doesn’t seem like investors are losing any sleep over this scenario.
Some Random Market Thoughts – 8/30/11 is an article from: 
