Judging by yesterday’s rebound, it appears to be the latter, as the major indexes found some footing and almost wiped out the previous day’s losses.
Just as a combination of events provoked Tuesday’s downturn, a different combination caused Wednesday’s rebound. Some of the contributors to the upswing were strong earnings, a falling dollar and rising commodity prices.
The Fed’s Beige Book report still stuck to its mantra of “modest growth.” I suppose that as long as any words are uttered that contain “growth,” the market will take that as a positive and rally on, no matter whether it seems to the rest of us that way or not.
The dollar took a big dive and fell 1.6% against the euro, while gold and crude oil rallied. The futures are pointing to a stronger opening as am writing this in Germany at 2 am PST.