(As of 7:26 am pacific)
Markets opened strongly this
morning on several bits of news most notably, the Euro Bank’s pledge to buy
unlimited amounts of bonds from distressed countries within the zone. ADP employment reports, which are regarded as
somewhat inaccurate, suggest that employment is picking up. China also is in the news with attempts at
stimulus, approving 25 subway projects in the country. The August ISM Services report came in strong
and above expectations, indicating growth in this important sector of the
economy. Oil and gold are up, as are
most commodities while the dollar is mostly up.
Lost in the news and rhetoric is the fact that the ECB also lowered
growth forecasts for the next two years for the Eurozone. When the dust settles from this raft of news,
after an extended period of dormancy, I think that investors will focus more on
the negatives aspect of European prospects and that much of today’s huge
initial gain will be erased.
