Friday, November 21, 2014

Economic Journal - Friday, 11/21/2014



(As of 7:00 am PST)

Stocks are soaring at today’s open with US indexes up over 1% and on pace for another week of gains. A surprise rate cut from China’s central bank along with dovish comments out of European Central Bank President Mario Draghi, helped to send global equities higher to close out the week. The People’s Bank of China announced today that it cut its key lending rate by 0.4% to 5.6%. The rate cut was the first of its kind in over 2 years for China, as the central bank moves forward on efforts to strengthen economic growth in the region. Asian markets responded positively, with stocks rallying to finish week. Optimism carried into the European open. Investors applauded the China news along with comments from Mario Draghi that the ECB would step up its stimulus programs in an effort to see inflation pick up to the central bank’s target. European stocks soared, with most indexes up well over 2%. The risk trade is on today with commodity prices higher as well. We haven’t seen a move like this in several weeks, with indexes breaking out to new records.  Could the Santa Claus rally be under way? We’ll find out as we head into a jam packed holiday shortened week next week.

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