Italian Reforms Cause Stocks to Soar

Alix Steel explains what's pushing U.S. markets higher.
8:43 | 11/11/11

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Transcript for Italian Reforms Cause Stocks to Soar
Dow futures were up this morning on news out of Italy and Greece joining me now to discuss all the business headlines at this hour -- -- -- from street. I think this CEO let's get started when it. Italy and -- what's going on there. Writes us we Italy we sought at this sending out past the budget lots and now that goes to the lower house they're gonna vote on it. Earlier this morning what we're looking at here is about sixty billion euros in spending cuts and tax hikes with the hope of actually. Balancing the budget by 2014. So here's a little details you -- -- be looking out for we're looking an increase in the back tax to about 21%. An increase in the retirement age to a -- 65. -- looking at and it's -- to sort out the taxis didn't hear said he tax invasion are coming to crack down on that. And a special tax on the energy sector. The reason why this is so important is it after this passes we're looking at the current prime minister Berlusconi actually stepped down. And we're looking at technical government that's -- -- be led by the EU former EU commissioner Mario Monti rather than snap elections were gonna see elections probably in February. And you really need a new government to -- Italy authority and help -- -- costs go down. So that's a -- looking -- terms Italy so grace of course swearing in -- new prime minister today gave that swearing in new prime minister as we speak I think I really -- former ECB vice president at -- -- -- is gonna form a new national unity government its key. And Greece now implement the bailout package and -- security measures agreed to with the entire euros on. Also we're looking -- needing an eight billion Euro tranche of its next ballot -- before December. Annie -- and eurozone leaders has said we need to make sure you're gonna implement your austerity measures before we gave -- the cash. Also -- -- -- really quickly got killed tension to France. What happened yesterday is that reportedly CNN forests are releasing email to clients saying that they were considering -- that they had downgraded France's a sovereign debt that was completely falls not true. But BA did they kind of had its email ready to go just in case with a little disturbing insight into France is -- -- -- From now on allowed though it does seem that they have the Dow is up already 150 points assessing Alice going on in Europe that seem to be easing the fears of investors just a bit this morning. Little also we have to look at the big sell off that we -- Wednesday's -- Buying back all those losses is now the cards are going into weekend her positive things could happen so many investors are kind of -- short we're betting against the market are going to want to unwind those positions. And maybe get along -- and -- in stocks and discount I kind of predicted we -- 121000 about two days ago when we -- that keeps up -- art and do that today. And it makes sense and we -- he's also ranges. We that we had and you -- oil prices from -- they seem to keep rising and this. Typing your -- -- something else going -- A few things in -- impressive me ninety dollars that came out of nowhere -- and that's for US oil. First of all I think it's sort of a risk on trade and sort of the same thing with stocks investors a -- a little bit better they want to get into riskier assets and oil is considered that. Also you're seeing it perhaps. It decreases in Europe and a little bit you're gonna see the Euro rally into the US dollar decline off of that which helps all dollar based commodities. Including oil. But in terms of actual supply and demand quite frankly ninety dollars a -- make a lot of salads and spears I talked to the nymex agree and there's two factors you marlin looked to for that first. You had the International Energy Agency -- -- using the global oil demand down for 2011. And 2012 specifically citing China and the US. And also there's just sort of numb hades we're big explosion in Iran that we have to pay attention to be -- IE -- -- I am IAEA excuse me. The nuclear watchdog for the UN saying that -- rant is indeed developing nuclear weapons. And the Wall Street Journal reported today that -- the Obama administration has been in quiet talks with United Arab Emirates to sell them bunker buster bombs so what are we looking at are we looking at some military strikes and you ran and they produce about four point one. Billion barrels million barrels of oil today. Not minor so I think we have to pay attention to that. Also going forward for oil some definite uncertainty and when it comes to -- -- without your specialty is gold and it's been doing quite well again recently what's behind this upsurge. Really interesting -- it's a really good gauge of how investors are feeling and their feelings very confused. On the one hand you have inflation concerns and that is at the crisis in Europe keeps exploding is the ECB the European Central Bank going to have to become the lender of last resort. Are they going to have to print euros and sell and buy government bonds for an undetermined amount of time to help the -- save the -- -- Now that happened that's inflationary and that's very -- -- -- on the flip side you -- -- -- environment. If the -- is gets worst of liquidity dries up mean European banks are responsible for like half. But of capital world credit which is a huge amount so good that dries up what is that -- to gold. We look at 2008 once Lehman Brothers declared bankruptcy gold lost a third of its value in dollar terms. But -- -- say you know the Euro and the pound. Golden League record highs we could do something very similar and we had that traders on the futures market -- -- get out they're very scared hot money was out. But was that sort of add physical demand picked up and gold made new records. I think it's going to be a very mixed very Dicey environment experts I talk to -- just as confused -- little disturbing. But you -- -- a look -- China we have a report this week that they could you know consume about 400 tons of gold this year that's double what they did last year just -- Barcelona -- looking at 270. Tons and gold bars means big investors -- -- -- Central Bank buyer and that's a big deal. A lot to look into -- efforts are now we are also supposed to get some new numbers on consumer confidence within the next half hour. What should we be expecting from -- reports. -- -- -- improves slightly -- November consumer sentiment index he just about 10 o'clock like you mentioned it's the preliminary read it should be over that sixty level I saw a principal risks like it says oil is heading -- hundred dollars a barrel now that might dampen consumer sentiment. Also October same store sales comparison reports were very bizarre. You have really -- companies all the send reporting weaker sales you had. Coming that we're doing so great reporting double a better sales so I think that it's gonna be a little bit murky. If you look at the -- -- that we got on Thursday imports only rose about three tenths of -- percent that's not that much and it rose because of autos and materials not because of consumer goods in fact consumer good imports have slowed over 4% since February to keep them back -- -- Members of some conflicting consumer information out there that don't look a little bit about and that global we've been hearing a lot about that but now. Comes word of the bankrupt firm is actually affecting -- how is that. Guess so yeah there's a different kind of money -- and I 600 million dollars or beheaded a CF TCU said -- and massive -- seek play here in and that hasn't really been very helpful that's still amassed. Put her -- a lot of traders yesterday as it is is threefold first of all if you just have cash right out MF it's frozen it he whiny -- trading positions and enough cash to move to another firm and be able to -- but that firm. You're still frozen -- -- little -- okay. The difficulty comes when you still have positions that are frozen but not enough cash to play -- another firm. And then so I think despite missing on the volatility seen the futures market with all commodities including oil. And gold is because traders -- their long or short they know they're betting against the -- -- for the price have to offset. CBC a lot of options buying here perhaps even put options worry about against the price and a person -- -- option also has they had to make you bet against the price so kind of accelerates any sort of sell offer any kind of rally that we see and -- really big time volatility and hearings get tickled -- That's -- really shake out. Yeah that'll -- there's got to be sorted out all right now. There anything else you're going to be keeping your eye on today out. DeVon want to get dizzy reporter really did quarter -- -- Almost two and a half percent in premarket trading it was as kind of a surprise because advertising is doing really well immediate network did well that -- and resorts did really well in terms -- revenues to keep and -- and that. And next week we also had October. Retail sales deathly keen to that it's private businesses as well Wal-Mart which we didn't get in the last screen for same store sales the inflation data so it is definitely a busy weekend here at a -- that tech. All right delete your eye on amounts of -- our parent company here we're gonna take a look at the Dow one more time before we go without 178. Already -- last. Looks like investors are. Our I encourage this morning. Yeah thank you so much about great talking to you.

This transcript has been automatically generated and may not be 100% accurate.

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