Japan's downfall is bullish for American companies. Think about it, you kill off the competition and you take in more sales that before you did not have.
the market went up because this event makes QE3 more likely. Inflation is driving the market up. When that bubble bursts, no amount of increased business to GM because Toyota was offline for a few days is going to counteract it.
I don't buy either of your arguments The Tsunami is BAD for American companies, especially ones with foreign exposure. You are going to have less people spending money. And what effect will decreased production of Japanese goods have on prices? Less supply = higher prices Sure you will get action in some construction related stocks, equipment will be needed to rebuild. The long trade relates to anything that relates to rebuilding. Equipment / Supplies Don't get me wrong, the rebuilding will have a great impact on related companies, and other companies that benefit from the success of those related companies. In the mean time, however, there is going to be less demand from Japan... for oil .... electricity.... tech devices.... luxury items, etc. I think the market acted as it did because of technicals. We have already sold off. People are hesitant to sell from here, for now. Many stocks have already corrected to attractive levels. Japan is temporary. Are people going to bail from their positions for something that will blow over? Sell here and you run the risk of being underexposed. That is my take on it. I don't expect a QE3, I don't think it would be allowed. That is going overboard. QE is a temporary device to stabilize the market as we bounce from a recession. QE3 is an asset bubble at the expense of dollar destruction. QE has done it's job, there is no need for a QE3, no matter how the market responds here. The economy has improved, jobs have bottomed. The market does not need to go higher from here to create jobs. From here, jobs have to return organically. This all being said, can we sell off from here? Sure, though I THINK the market showed us that this correction is over.
I saw the guy on CNBC making that case. These guys on tv are totally irresponsible. Japan manufactures very little in Japan. It would be worse if there were an earthquake in alabama. I watch these nitwits on tv and watch the market go up when the middle east is burning and I can only conclude the market is a total fraud.
My theory why stocks went up: The ask continued to rise and get punched while the bid followed the ask.
There were no reactor problems until after the NYSE close. I think we open lower on Monday, but there was no market reaction to the Chernobyl melt back in '86, or 3-mile for that matter.
Better buy that new tech gadget you've been thinking about! http://www.investors.com/NewsAndAna...ct-Techs-But-Toll-May-Be-Relatively-Small.htm And don't expect price increases to be temporary, if they occur LOL... rare earths and silver, both needed in gadgets, will conveniently, legitimately, and logically be passed through.