Dow: The News Is Bad, but Markets Look Up

There is a boatload of macro-related news this morning, much of it rather underwhelming. Still, markets worldwide appear to be taking a rather sanguine view of things, perhaps considering that yesterday's sell-off was overdone. In the U.S., the Dow Jones Industrial Average (INDEX: ^DJI) is up 0.2% as of 10 a.m. EDT after four straight losing days.

China's central bank injected a record 290 billion yuan ($46 billion) of liquidity into the banking system on Thursday ahead of the Golden Week holiday that begins on Monday, but borrowing rates continued to rise. If not a borrower, then an investor be: The Chinese stock market appeared to take solace in the measure, as the Shanghai Composite Index gained 2.6% despite a release from Beijing's National Bureau of Statistics that said Chinese industrial companies' profits have declined for a fifth consecutive month in August (then again, as The Economistreminded us recently, "No one knows if Chinese statistics are true.")

After a second night of protests in Madrid, Spain is expected to unveil its 2013 budget today, which will likely include a further taste of austerity -- a sour prospect for Spaniards. Tomorrow, Spain will reveal the results of an independent audit of the Spanish banking sector, which is at the very heart of Spain's woes. The dithering in asking for and crafting a European bailout package for Spanish banks is terribly damaging for market perception.

Finally, in the U.S., second-quarter GDP growth was revised downward to 1.3% from 1.7%. Couple that with the Business Roundtable's index of CEO confidence falling to its lowest level in three years, and it's just another reminder -- if it was necessary -- of the urgency for lawmakers to steer the economy away from the looming "fiscal cliff." The good news is that lawmakers are preparing behind the scenes to address the issue, contingent on the outcome of the presidential election. Meanwhile, "These Stocks Could Skyrocket After the 2012 Presidential Election."

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