What Rotten Luck

 | Oct 30, 2012 | 3:20 PM EDT
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What rotten luck we have. This was the one day when the insurers, the oils, the banks and Italian bonds traded up in Europe -- and U.S. trading was closed? That's unbelievable.

First, the big reinsurers in Europe -- the one who, in many cases, backstop our insurers -- all traded up Tuesday, as Hurricane Sandy looks as though it was manageable. This means, first, that they have the reserves and, second, that they can raised rates.

Also, I am amazed at how well Deutsche Bank (DB) is doing. The investment-banking business is looking terrific, and the trading side of the ledger's been extraordinary, with only two down days this year. I always knew Deutsche was a great bank, but now it is truly ascendant.

At the exact same time, UBS (UBS) announced big cuts to its fixed-income desk. The bank is exiting the business, which means the long-awaited consolidation and shrinkage of the business is upon us. Analysts on the Deutsche Bank call were ecstatic about the move. U.S. international banks would be jumping, too.

Over in the oil space, BP (BP) not only released a terrific quarter last night, but also boosted its dividend. This is the same BP that has had to fire-sale properties endlessly because of the Macondo disaster. It looks like the company's earnings power, despite its divestitures, remains more than intact.

Finally there's the Italian bond market. Last year at this time, we saw Italian 10-year bonds trading at a 7% interest rate. That move caused a major selloff in the U.S. market -- the S&P 500 lost 400 points on the day that the 7% line was crossed.

Now Italy is raising 10-year money below 5%, and it is real demand, in part because Italy is turning into a success story.

Any one of these might have, at one point, triggered a rally in the U.S. But all of these? Who knows how high the market would have climbed.

Just our luck.

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