Good Morning. An excellent day. A very excellent day! A day those bad bears limped wounded back to their caves. On the heels of word the ECB is considering buying corporate bonds (which pushed up Germany’s, France’s and London’s stock markets up 1.95, 2.3% and 1.7, respectively) and very good earnings reports from Apple all the U.S. major indexes closed markedly higher with the Dow ending up 215 points, 1.11%, at 16,615, the S&P 500 finishing 37 points higher, 1.96%, at 1,941 and the Nasdaq posting an amazing gain of 103 points, 2.40%. Apple is in the Nasdaq and when the behemoth reported a 13% rise in profit beating Wall Street expectations the buyers came running pulling up the benchmark index. Apple ended the day up 2.72%. The Dow would have done even better if Coca-Cola hadn’t posted disappointing earnings. So how good of a day was it? The S&P had its biggest one day gain of the year rising for the 4th straight day. Although not its best day of the year, the Dow is back in positive territory for the year. Talking about earnings, so far this season 67% of the 106 companies in the S&P that have reported earnings have topped forecasts which is a little better than the average of 63% since 1994. Profit growth is tracking at 7%, up from 6.4% on October 1st.

We also had some good economic data yesterday. Existing home sales rose sharply to 5.17 million unites annualized from August’s 5.50 million, a 2.4% increase. However, y-o-y sales are down 1.7%. Inventory has fallen to 5.3 months from 5.5 months. A 6 month inventory is considered a balanced market.

Overnight Japan’s and Hong Kong’s markets rallied big following U.S. equities but China’s market closed weaker. The major European indexes are trading a little higher right now after being in the red most of the morning. Here in the states the Dow is up slightly, 25 points. We’re at an important level folks. Yesterday’s report mentioned this level, basis S&P, would be our first resistance. Let’s see if this market can attract enough buying to get through it. Hope for some good earnings reports or economic data.

Considering the move in global equities oil’s response was very weak. While Brent got a little “love” from the European bourses rising 82¢ closing at $86.22 but WTI’s gain of just 10¢ to $82.81 is nothing short of lame. If I were a bull I’d be very, very disappointed. Brent also got a little boost from the Chinese better than expected Q3 GDP report I mentioned in yesterday’s report. If oil prices can’t go up on positive data what’s going to happen on negative data?! Bottom line, until there is visible movement in Saudi Arabia’s oil production the market will remain highly vulnerable to downward price pressure from negative macroeconomic headlines. The bulls are hanging their hat on a couple of things. First, as the civil war expands in Libya oil production will most likely decline and second, beginning in early 2015 additional sanction kick in on Iran further curtailing their exports. That being said, the WTI daily chart dating back to the middle of the summer is not looking good for the bulls.

The API’s were released last night and came out about as expected. WTI is up 24¢ this morning.

Natural gas rebounded from its lowest level of the year yesterday closing 4.1¢ higher at $3.711. Natural gas prices have dropped more than 55¢ (13%) since their high over the summer to an 11 month low. Mother Nature was very, very kind to the bears over the summer and has continued here benevolence this week. The forecast continues to show very mild weather over the next couple of weeks although today’s 11-15 day forecast is marginally cooler than yesterday’s. With nothing new in the market natty is down 2.4¢ this morning. Chatter.

As a reminder that the “official” hurricane season doesn’t end for another 9 days, tropical depression 9 has formed west of the Yucatan with the NOAA giving it a 40% chance of further development. It’s expected path of due east should pose no threat to the U.S.

If you are looking to refinance now’s a good time (although I bet most refinancing has been done by now). Per Freddie Mac, the average 30 year fixed rate mortgage interest rate hit its lowest level in 2014 last week decreasing from 4.12% to 3.97% (crazy numbers! I remember buying my first home in the late 70’s with a double digit interest rate mortgage!). The interest rate hasn’t been below 4% since the week of June 20, 2013 when it was 3.93%. The 15 year fixed rate decline to 3.18%. Cheap money!

And finally, The Treasury Department released this month figures showing that federal tax revenue exceed $3 trillion in fiscal year 2014. This is the highest revenue has ever been. By the way, the deficit is still almost $500 billion so it’s apparent the increased revenues are not being used to pay down debt. Have a good day.