(As of 7:30 am PST)
Investors were surprised this
morning by news out of Japan. The Bank
of Japan initiated a massive easing program to break the grip of deflation that
has caused economic stagnation for many years.
The flood of expected liquidity acted much the same as the US
Quantitative Easing packages (We are currently in QE3), causing world markets
to rise, especially Japan. The Yen
dropped by over 2% against the US dollar and other foreign currencies. The news from Japan sent US markets higher in
early trading, in what otherwise would have been a bleak market opening. Jobless claims were up in the US and stories
abound about cracks in the vibrant economic recovery that we have been
experiencing here. There has definitely
been a shift in market momentum to the down side, in spite of today's
rise. Bears are coming out of the bushes
predicting a reversal of what has been a multi-year rally. There is also some discomfort as Federal Bank
governors talk about how to ease out of QE3.
As stimulus is withdrawn it could signal a deleveraging phase for
investments. Gold continues to trend
downward and oil is falling further from the large drop yesterday. Interest rates are stable.
No comments:
Post a Comment