Ignoring the latest spike in Spanish bond yields and big drop in German investor confidence, stocks jumped Tuesday. In recent trading, the Dow was up 156 points, or 1% while the S&P 500 was up 1.3%.
Better-than-expected U.S. housing data certainly helped the mood but the rally was largely driven by expectations for more action by the Federal Reserve at this week's policy meeting, which concludes Wednesday.
"There's a lot of hope out there we'll see something out of the FOMC tomorrow," says David Rosenberg, chief economist and strategist at Gluskin Sheff. "There's no question the market is positioned for the Fed to announce something very big tomorrow, probably in the form of another round of quantitative easing."
In keeping with his bearish reputation, Rosenberg believes the bulls will be "disappointed" by the Fed meeting.
First, he does not believe the FOMC will announce another round of quantitative easing (at least not this week.) Second, andRead More »from Bulls Betting on “Something Very Big” From the Fed: Rosenberg