US and European stocks rallied on Wednesday on news the German 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.
The market awaits the Fed announcement this morning, scheduled for release at 12:30 p.m. Eastern time, 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. Yesterday, the major market indexes found support along the lows of their recent pullback following last Thursday's breakout on increased volume - constructive action.
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