Stocks soared with the S&P stock index closing +3.4% higher on the back of overnight news out of Europe.

The combination of Europe coming out with some tangible commitments (kudos to "Markozy"), U.S. GDP numbers that are in line, and the mountain of cash sitting on the sidelines all conspired to send credit spreads gapping tighter.

The benchmark financial bonds (i.e. Goldman Sachs 2021's, Morgan Stanley 2021's, Bank of America 2021's etc.) closed 50 basis points tighter in a massive move.

The Yankee banks (i.e. USD-denominated bonds for European issuers) closed anywhere from 20-60 bps tighter.

The investment grade CDS (credit default swap) index closed more than 10 bps tighter on short-covering in CDS.

There was particular emphasis by investors on the primary new issue bond pipeline with more than $15 billion in new bonds printing.

Reflecting typical bull-market dynamics, primary new bond issuance pushed spreads for existing secondary bonds tighter in most cases.

Normally, primary bond issuance would cheapen (widen) out spreads for secondary bonds.

Taking a step back, this player recalls his morning conversation with a cab driver, a former graphic designer who lost his job a year ago and has resorted to driving cabs after failing to find any positions in his profession.

The graphic designer was laid-off by a pet-supply company that employed around 75 workers; that company now employs fewer than 50 workers.

Unfortunately it is not a bull market in the real economy.

As noted last week, we could very well see a technical rally in the markets into year-end, removed from underlying economic fundamentals.

If and when another Quantitative Easing (QE) program kicks in, more fuel will be added to the market rally.

QE will fan the flames of future inflation, however, hurting those with the most to lose: pensioners and low-income earners.

University of Michigan consumer confidence numbers are out on Friday.