Stocks are enjoying follow-through buying this morning after an unexpected bounce in the US on Friday despite the dreadful US employment report. Stimulus plans were unveiled by Obama over the weekend along with comments from the President-elect dismissing near-term deficit concerns.
Some (like me) fear the stimulus from infrastructure spending will take far too long to work its way into the economy. Japan tried that route in the 1990s and had very little success to show for it. Realist also fear that infrastructure spending will end up resembling Boston’s Big Dig, a $4 billion project that ended up costing $16 billion and ended up a leaky, dangerous mess.
Those fears will be be taken up in earnest down the road. This morning, at least, it’s all about stocks. Solid gains in Asia and Europe are following through in US futures. EUR/JPY is nearly reached 121 from a 115 handle on Friday. Look for consolidation near-term with 119.30/50 bids to provide support on pullbacks in the short-run.
