Market Close Insights: Rate Cuts, Leadership Changes & the $600 Million Mystery 💼

Europe cuts rates … and what happened to that missing $600 million?

Europe cuts rates by .50 basis points. New guy, new rules. Jean-Claude Trichet is out and Mario Draghi is in. Now, US regulators are wondering what happened to $600 million in customer funds under MF Global’s care. I am sure there is more to come on that front.

It’s Thursday and how the market closes today is going to be very important in my mind. If we see the S&P 500 close lower, I think that will be a negative vote for the stock market. Additionally, if we see the bank stocks close lower on the day, I believe that’s a negative vote for the banks.

What is gold doing during all of this craziness? It’s going higher. Since we started broadcasting, we have continually shared with you the long-term trend for gold, which continues to be positive. That came to the forefront today when more and more investors moved into gold.

What is interesting, is that we’re seeing net deposits coming out of banks both in Greece and Italy. This is a disturbing fact and one that will eventually have to be addressed by the private sector and government. What it does illustrate however, is that money can move around pretty quickly when it wants to. We may have already seen a stealth run on the banks in both Italy and Greece.

I mentioned how important it is to see where these markets close today, as it is Friday tomorrow, and we have a lot of nervous,trigger happy traders who may not want to hold any positions this weekend. With the hedge funds largely under performing for the year, you are going to see some hedgies swing for the fences à la Jon Corzine, hoping to make a home run and salvage a poor performance. This will only add to more market volatility.