Another Somewhat Deceiving Rally led by Large Caps - McDonald's (MCD) and General Motors (GM)

Dow is up 1% but 2 of its components are ripping today... MCD and GM both up 6-7%. (dividend increase on the former, UAW concessions on the latter)

Breadth is actually still a bit troubling: 3 to 2 advance decline on NYSE, and 1:1 on the best performing exchange of late: NASDAQ.

However, both the SP500 and NYSE have cleared their 50 day moving averages intraday so a close above those levels would be bullish - as I mentioned yesterday this just looks like a market that wants to rally into Big Ben.

The more I think about it, the more I wonder what a 0 basis point raise on the Fed funds along with a 50 basis point cut on the discount window (to make the 2 rates equal) would sit with the market.... this might be an option to consider that would be a good middle ground. Keep in mind Friday's job report (which is subject to revision and I expect to be revised up down the road) is the only market moving negative economic report we have seen - retail sales have held up thus far, and most other economic items have been neutral. While there are calls for the Fed to look ahead, maybe this more conservative Fed will sit on their hands on the Fed Funds pending more data, and just adjust the discount window. Food for thought.