What a difference a week makes. Last Tuesday, the markets retreated sharply and now, 5 trading days later, decent economic news, sliding oil prices and hopes of a quick Libyan resolution pushed the major indexes higher.
Providing the necessary ammunition to reverse yesterday’s mid-day sell off were decent reports on consumer spending and manufacturing. Adding to the bullish mood were Warren Buffett’s comments that he’s on the prowl for some new acquisitions this year.
In a letter to shareholders he said that his war chest had grown to some $38 billion and “our elephant gun has been reloaded.”
Those notes must have evoked the warm fuzzies on Wall Street and helped the rebound during the latter part of trading. To be sure, it was not all bullishness; there was a lot of short covering going on as a result of open short positions left over from last week.
It was one of those days when most of the major asset classes ended up higher including bonds, emerging markets, precious metals, energy, commodities and domestic equities.
Let’s wait and see if this feel good attitude will carry into March as well.