A hitherto relatively low-profile constitutional court in Karlsruhe, Germany, where the judges wear red robes and accessories that call to mind the Renaissance arbiters of Piero della Francesca’s frescoes, assumed, briefly, the epicentre of the euro-zone debt crisis on Wednesday. This morning the court decided that the $640 billion permanent rescue fund known as the European Stability Mechanism, or ESM, was not in danger of breaching Germany's explicit ability to control its own budget. Germany will carry on contributing about a quarter or more to this safety net.
U.S. futures have reacted by rallying sharply, but the reaction remains somewhat muted relative to other confirmations of QE coming out of the ECB or the Fed. Meanwhile, the market awaits the Fed announcement on Thursday, where it appears that investors have built in some expectation of an announcement regarding QE3 in some form or another. Technically, the U.S. markets continue to hold last Thursday's breakout to higher-highs as they have tacked sideways in relatively quiet trade.
Gold and silver are showing the sharpest reaction to the European news this morning, as both are attempting to clear to their highest highs since their current, steep rally began in mid-August.
Apple (AAPL) will announce the new iPhone 5 today, and investors have sold AAPL stock over the past two days leading up to today's announcement on iincreasing selling volume that has come in well above average.