Not that there's much rosy news in Europe. Today, Draghi lowered the growth outlook in Europe for 2013, and took a smack at U.S. lawmakers by saying "fiscal policy issues in the U.S. could hurt confidence longer than assumed." The ECB is holding rates steady at 0.75 percent
Here in the U.S. plenty are feeling all bulled up: the U.S. markets are not at 52-week highs, but optimism certainly is. The weekly American Association of Individual Investors poll showed Bulls at 42.2 percent versus 40.9 last week, the highest level since March.
No sign of a collapse in bonds, either. On Monday, I said in my 2013 Predictions that central bank activism would continue into 2013.
Just look at what happened today. France had a debt auction today, which priced at historically low yields. The 6 year was at 1.01 percent, the 7 year was 1.27 percent, the 15 year at 2.56 percent. A 15-year bond at 2.56 percent.
Why? Why, despite the poor outlook, are investors still flocking to lousy-yielding bonds...even in Europe?
Because the ECB has everyone's back.
In fact, central banks around the world seem to have everyone's backs--and bonds. Sovereign bond yields still going lower, everywhere, with activist banking regulators--ECB, Fed, Bank of Japan, Bank of England.
1) Fiscal cliff: I said last week that you can make a deal on taxes on the back of a napkin. Now Politico has coined a name for it: the "37% Solution;" raising the tax rates to 37 percent from 35.6 percent for those making over $250,000, with some talking about raising that minimum to $500,000. So you split the difference between 35.6 percent and going to 39.6 percent as the President has proposed.
2) Apple: as many explanations for the drop as there are analysts. Lots of comments about Apple's decline yesterday, and and lower price pre-open. Sales concerns are the most cogent. Most cited the AT&T comments at the UBS Telecom conference, where they implied fourth-quarter iPhone sales were up only slightly compared to fourth-qurater last year. There are concerns that while Apple has avoided a price war with Google, they are at risk at cannibalizing their own large iPad business with the lower-priced iPad mini. True, but we have known that.
Some note Sandy could be a factor. Some note technical issues: 50 day moving average is close to crossing over the 200-day moving average, a negative technical indicator.