Well, it didn't take long to get to 14k, and close well above it. Investors now are more confident in the stock market. A lot of it had to do with Citi (C). Even though they said profits will be down this quarter, investors gained confidence in their opinion of future earnings. And as I've said many times on this blog, Wall Street reacts on the future impact of today's events.
Here's an interesting thing: The media has convinced almost every person in America outside of Wall Street that we're headed for a recession. Stories of mortgage brokers losing their jobs and Realtors waiting tables, etc. These sort of stories do affect people's confidence.
Don't get me wrong, I still have concerns about this market. I think that is has been manipulated somewhat, especially on US side of things. I think there is a lot of growth in the world right now, and because of the globalization of markets, we are affected by their growth, and affected positively.
I think the rate cuts are a political move, to be honest. Markets have to price in risk factors, and the credit issue we've faced should factor in. The Fed cutting rates boosted the market, and they appear committed to doing everything in their power to continuing that stance. But, if things truly end up not so good, there won't have been that chance for the market to price in the risk of future events, and things could come down pretty hard.