Thing One: Be Gentle, Ben: The stock market is a big, dumb drug addict.
If you still needed proof, all you had to do was sit back and watch the market action yesterday, when the Dow Jones Industrial Average soared 286 points, the best day of the entire year, on hopes of another fix of sweet, sweet stimulus from the Federal Reserve. Three Fed officials hit the chicken-dinner circuit yesterday and said they were worried that Europe's marathon of incompetence would hurt the U.S. economy, which might call for some "QE3," as in a third round of quantitative easing, as in a giant boatload of money that will float the stock market and, maybe a little, the economy. Their speeches followed a story in Wednesday's Wall Street Journal by top Fed-watcher Jon Hilsenrath that traders interpreted to mean Ben Bernanke's money-launching finger was getting itchy. The story and the Fed speakers really said nothing very surprising, but they were enough to trigger a massive technical bounce in the stock market, wrote the WSJ's Steven Russolillo.
Unfortunately for the shaky market, the thesis for the bounce will get a test first thing this morning, at 10:00 a.m. ET, when Bernanke testifies before the Joint Economic Committee of Congress. The market will be scratching its arm, drooling, waiting for any word from Bernanke that his money needle is getting loaded again. CNBC's Patti Domm warns that market expectations have run so high that Bernanke will almost certainly disappoint them. Bernanke is likely not going to lay all his cards on the table today. "We believe that Chairman Bernanke will ultimately disappoint market participants," Christopher Vecchio, Currency Analyst at DailyFX, said in an email. But not to worry, stock market, we still have a Greek election and weeks more of European bumbling to make the economy worse before the Fed's next policy meeting, scheduled for June 19 and 20. You may get your cash fix yet.
Thing Two: Nasdaq Said It Was Sorry, OK? Now Leave It Alone: The Nasdaq OMX Group, stung by lawsuits and embarrassments over technical glitches that marred the ballyhooed Facebook IPO, has offered $40 million in cash and discounts to traders who lost more than $100 million on the day. Using your math skills, maybe you can see why maybe some of those traders might have a problem with that offer, as the Huffington Post's David Levine points out? Nasdaq's CEO Bob Greifeld is really, really sorry, you guys, but he just wants his life to get back to normal. And, to be fair, the Facebook debacle is not nearly all Nasdaq's fault, as much as Morgan Stanley and Facebook and the other underwriters would like you to think it is. Meanwhile, the savvy investors who bought Facebook in private markets way before the IPO, thinking they were going to make a killing when Facebook went public, just want their millions back, the Wall Street Journal writes.
Thing Three: Spain Will Not Be Pushed Around Like Greece: One of the things that might also have helped the U.S. stock market yesterday was a rumor that Europeans were coming up with a plan to save Spain's banks. There are only about 10 of these rumors a day, so whatever. But the New York Times points out that Spain's banks will soon enough need saving, and that Spain has more bargaining power than Greece did, owing to its size and the fact that it has finally dawned on most of Europe (maybe even eventually Germany) that strangling economic growth might not be the best approach to solving a financial crisis.
Thing Four: What We Have Here Is A Failure To Regulate: Senators grilled regulators yesterday about their oversight of JPMorgan Chase while it was busy racking up huge losses in the credit-derivatives casino, er, market. Fed Governor Daniel Tarullo seemed to help convince senators that the Volcker Rule prohibiting banks from gambling with their own money might have prevented the losses. To which we at the Huffington Post say, "We told you so."
Thing Five: Way Too Much Social Networking: Passwords for social-networking sites LinkedIn and eHarmony are among millions that have been accessed and unscrambled by a hacker, Reuters writes. So, you know, change your password: "Mary Landesman, senior researcher with messaging security firm Cloudmark, said that a hacker who has access to somebody's LinkedIn credentials along with their eHarmony account might be in a good position to commit extortion."
Thing Six: Bribery Not Just For Wal Mart De Mexico: Three international oil giants -- Eni, Chevron and Lukoil -- are investigating claims that officials were bribed in Kazakhstan to keep supply shipments flowing, the Wall Street Journal reports. Anonymous tips about the alleged bribery highlight "the difficult choices companies face operating in developing countries," the WSJ writes.
Thing Seven: Goldman Is Just Going To Have To Cut Back: This is going to be heartbreaking news, but we know you'll bear up somehow: Goldman Sachs is going to have to trim the number of new partners it names this year, to maybe less than 100, writes Susanne Craig of The New York Times.
Thing Seven And One Half: RIP Ray Bradbury: Ray Bradbury, author of such science-fiction classics as "Fahrenheit 451," "The Martian Chronicles" and "Something Wicked This Way Comes," has died at the age of 91. In a recent essay for the New Yorker, Bradbury said of his childhood imagination: “It was one frenzy after one elation after one enthusiasm after one hysteria after another." You could say the same for the amazing stuff he wrote.
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Calendar Du Jour:
Economic Data:
8:30 a.m. ET: Initial Unemployment Claims for the week of June 2
3:00 p.m. ET: Consumer Credit for April
Corporate Earnings:
Before Market Open:
J.M. Smucker
After Market Close:
Altera
Heard On The Tweets:
@paulvigna: If Bernanke even says words that have the letters Q and E in them tomorrow, the Dow'll probably jump 300 points. #wsj
@saraeisenFX: *DRAGHI SAYS NOT ALL GLOBAL PROBLEMS DUE TO EUROPE
@AdrianChen: Warning: LinkedIn was hacked. Be on the lookout for spam emails that are slightly different than the spam emails LinkedIn usually sends.
@nasiripour: Ouch. Sen Menendez says OCC has "well deserved" reputation for being too cozy with the banks it regulates.
@EddyElfenbein: Estimates for $JPM's Q2 have fallen from $1.24 pre-Whale to 88 cents today. Painful yes but they're still making money.
-- Calendar and tweets rounded up by Khadeeja Safdar.
And you can follow us on Twitter, too: @markgongloff and @byKhadeeja