(As of 7:20 am PST)
After
an impressive 300+ point rally on Thursday for the Dow, the markets opened
Friday on an equally positive trend. Yesterday’s surge was fueled by the
European Central Bank’s report that there would be more stimulus before the end
of the year. Today’s updraft is being fueled by positive earnings reports from
Google’s Alphabet Inc., Amazon and Microsoft who all reported after the bell
Thursday. Those reports have pushed the tech-heavy Nasdaq up to a 2% gain in
early trading. Overnight, China continued the theme of more stimulus. The
People’s Bank of China didn’t just hint of stimulus, it actually provided it.
The PBOC cut its one-year lending rate to 4.35%, and its one-year deposit rate
to 1.50% while lowering the required reserve ratio for qualifying
institutions. The surprise stimulus announcement from China sent Asian
and European markets soaring into the weekend while adding fuel to an already
positive rally on Wall Street. Earnings will continue to drive today’s action
with little economic data in store. With this week’s rally, the S&P500 has recovered
most of this summer’s losses and returned to positive gains for the year. As we
head into a historically optimistic time of the year for stocks, it wouldn’t be
a surprise to see this rally pick up steam.
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