The Rally's On - Across The Board

An across-the-board rally in stocks, Treasuries and commodities.

This hasn't happened in a while. What does it mean?

1) Flight from risk has temporarily been stalled

2) Traders are moving out on the risk curve

You can even see this in Treasuries. The treasury rally is short covering in the same way. They are using freed up capital to chase better yield like corporates and preferred stocks of banks.

In stocks, the S&P 500 has rallied 11 percent since the bottom of 666.79 last Friday.

A different tone to today's move up, but unlike yesterday there are a few data points to back up the move:

1) February retail sales above expectations, with an upward revision in January;

2) The debt downgrade of our parent General Electric was not as bad as feared, and S&P went out of their way to lavish praise on the company, noting, "the outlook is stable." GE has rallied 65 percent since bottoming last Wednesday.

3) GM said they did not need $2 b in March from the government, not because sales were great, but because of more successful company-wide cost-cutting efforts (they're still working to secure $165.6 billion in low-interest loans).

4) A far better tone from bank executives, with Bank of America's Ken Lewis today reiterating they were profitable in the first two months of 2009 and they were eager to give back the TARP money. Also, there is a widespread belief that mark-to-market rules will be modified.

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