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The Drivers

April 23, 2012 – 5:23 pm

Driving the market this week will be earnings reports and news coming from outside the U.S. France’s election is heating up and a Socialist is channeling President Sarkozy. The stock market hates change so it reacted as the Socialist, if elected, promises to ease up on stringent spending cuts.

Politics in Europe are getting more extreme as those out of power make populist promises to kick out the ones in power who made unpopular fiscal decisions. Of course if the populists get elected they too will have to make hard choices. Meanwhile markets will show their displeasure. Volatility becomes more extreme to match the extreme rhetoric spewed from pandering politicos.

With little economic news coming out of the U.S. this week any news out of Europe and China will have an outsized effect on stock prices. Earnings have been better than expected but that expectation was sharply ratcheted downward in the weeks and months before earnings started to be reported so they may not have as much impact compared to what is going on in Europe and Asia. The better than expected numbers have been an offsetting factor and guidance for the future over all has been upbeat.

Tracking and understanding what moves markets is a never ending.

Good Trading
Steve Peasley

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