Market Update

SP inches up 4 points again (same as Wed); the market has been up for the last three consecutive sessions and 6 of the last 7; MTD gains now +4.4% and YTD +10.57%.  The story of this market has really been the same since Tues.  Equities sprinted out of the gates then, helped higher by the surprisingly large Mon night tax package (the big unexpected addition was the payroll tax reduction) but had a tough time up at the ~1235 level.  On Wed and again today, equities had an underlying bid, but buyers exhibited some signs of fatigue and weren’t willing to chase the broader market higher. Despite this, bad news continues to be shrugged off with 2011 growth being cited as the underlying driver of the market (example today being PIMCO which raised its growth forecast for 2011). There has been a notable divergence in performance, w/the financials surging higher in the last few sessions (the BKX jumped ~2% today and is up ~12% MTD) while some commodity-linked groups (materials and to a lesser extend energy) saw mild profit taking.  Newsflow continues to be dominated by headlines re:1) China (inflation Fri night expected to be less than feared; will the PBOC tighten policy again this weekend?); 2) Europe (Ireland today said its parliament will vote on the EU/IMF package on 12/15; while some of the opposition party members said they wouldn’t vote in favor, PM Cowen insisted he had the votes); 3) taxes(the Senate looks like they will vote on Sat and passage is likely; the House will be tougher – the Dem House Caucus held a non-binding vote today and rejected the plan while Pelosi said she wouldn’t call a vote until changes were made.  The votes are believed to be there in the House but Pelosi must first bring the bill up for a vote).