Ahead of the open, (01-12)

A global ‘warming’ emergency synchronization… rescue beginning in December 5, but only a piece of the puzzle as banking and sovereign debt crisis is interwoven.

Just as the Shanghai exchange suffered one of its biggest declines in 2011 overnight with PBOC officials still dampening hopes intraday of an imminent easing…Boom!...PBOC cuts reserve requirements after close by 50bp starting Dec.5 (cuts amount of cash banks must set aside to spur lending).

=Futures market reverse about 20 handles into 8am.

In Europe, a dud of an EFSF deal reached by finance ministers, speculation policymakers had made no progress on propping IMF funds with ECB not ready to do anything substantial…. BOOM!...A FED led blitz of Central Banks backed by US gov’t with a US-Funded Liquidity Bailout of worldwide dollar crunch!!. Yes, the same USD funding stresses noted here before the eventual 1275SP- to 1159SP rout just over week ago needed a quick Global bailout!. Simply, central banks rescued what EU officials couldn’t (liquidity shortage) in a bold move taking matters into their own hands.

= SPX rockets and recovers almost all the ground lost in November.

There was not going to be fade job of Monday’s rally as the market ‘squeezed’ higher off fresh cheap cash injections to come. Funny, how you can fix Germany’s 1yr debt going negative this morning (probably kicker for action), China’s horrible market day off renewed hard landing fears and a European ministers inabilities in just a few hours. Note, this intervention isn’t the holy grail guarantee, but it is a piece of the Eurozone puzzle.

Of course, what ails banks is now seemingly fixed for the moment as their lending to each other simply trickles down to economies, but it doesn’t put a blanket over the debt sovereign crisis. Expect more from ECB going forward to make this a true turning point for the crisis. ECB hard-line/standing pat seems to be getting it’s way and sooner than later they will be satisfied to step in. (more political reform etc.). Also, expect IMF co-ordinated program to get off the ground as well.

Unfounded rumors of a bank struggling to fund itself  this morning might have the ‘mishap’ talked about here last week for something to be done.  Still, it’s likely the German 1yr this morning is what spooked the CB’s to let loose their contingency co-ordination. This wasn’t made up overnight, it’s been in the works just in case.  In all, that should give confidence to investors co-ordination is always a possibility.

In all, add ADP# 200k ahead of NFP# Friday ( .. last week here...Employment whispers for Dec 2 starting to come in at 200k~.)..and equities just became sexy again. Last weekend did smell like a prelude to a rally, just as in October rally (noted early this week). Financials rallied ~6% , leading the tape (along with materials (high beta coals (CLF, WLT) steels led (X,NUE ), energy, and industrials). Bascially, you can trade commodity- linked stocks such as above that have been Shadowlisted in the past, as well as the high beta earnings plays related to China ..(ie.WYNN, LVS, CMI.) or just related sector ETF’s.

Although most of the day was over with at 8:40am, the fact SP added some 10+ handles in the last hour suggests some ‘ longs only stepped in’ after the early morning short covering. This suggests we may buy single stocks in anticipation of more upside into year – end. So, did we get our wish from financials to lead rally, just like in October?? They are down nearly 25-30% YTD and big rallies usually see worst sectors bought first.

You may not believe in CB’s actions, EFSF, China ‘s RRR, but this is a day where you can’t ignore the price action. Things are actually being done a step at a time, recall note here investors want action, not more speculation around upcoming (meeting, summits).