Whether it was Shannon Sharpe mentioning the Dow's recent surge pass the 14,000 point mark right before the lights went out on the Super Bowl, or just shrewd investors cashing in on profits, Monday's stock market retreated from the gains it took on Friday.
The reality however was everything from profit taking, to worries of an over stretched market, all the way down to renewed fears of an unresolved European debt crisis.
The profit taking and the fears of an over cooked market may be justified, as it is no secret that the Dow has made a remarkable comeback since bottoming out at 6,600 in early 09'. However after reaching its previous watermark of 14,000, not even NFL commentators could restrain their excitement in front of the most watched event in the world. The obvious disconnect with the speed of a market recovery and the sluggish nature of a middle class recovery may have caused many to feel that the market can't go up anymore than it has. Although the news of a good jobs report and a better than expected manufacturing report is what propelled it over the 14,000 mark on Friday.
The markets also reflected the cold reality coming from the Eurozone, as the yields for Spain and Italy once again spiked. Last summer, rising yields in trouble countries such as Spain and Italy were causing fears of contagion in the world markets. Those fears were soon put to rest when the head of the European Central Bank Mario Draghi came out saying they would do "whatever it takes," to support the Euro. The comment alone led to an easing of bond yields and a stabilization of the European Markets. The only problem with that is that an entire continents economy cannot sustain itself through bankruptcy, and debt, because someone said they would do something about it when it gets really bad. That is, unless they actually did something about it. Unfortunately, much like the debt ceiling in America, politicians all over the world have become expert at diverting problems rather then fixing them. They seem to have mastered the art of buying time through political grandstanding.