Lots of things are bouncing these days. Commodity prices are up across the board. The Baltic Dry and Baltic Capesize index continue to rise from their early December lows (up 73% and 152%, respectively). Copper, long referred to by the pros as "Dr. Copper" for its ability to divine the health of the economy, is up over 20% from its Christmastime lows. Arab light crude is up over 30% since that same date. The Bloomberg index of homebuilders' stocks is up 40% from its November 21st lows (a date that keeps looking like the definitive low for the stock market). The dollar value of the Brazilian stock market is also up 40% since its low on that same date. 10-yr Treasury yields are 40% higher than their year-end low. Lumber prices have jumped 25% in the past week. Corporate bond prices are up solidly across the board. And of course the S&P 500 index is up 12% from its closing low on Nov. 21st, while the VIX index of volatility (AKA fear) has dropped by half.
Pessimists and doom-and-gloomers would say this is all simply a "dead-cat bounce," and we are sure to see all of these signs of life fall back to new, cataclysmic lows. I continue to believe we have seen the worst of this recession. Will someone please let Congress and the president know that there is no urgent need for a trillion dollar stimulus bill?