(As of 7:30 am pacific)
The risk trade is on throughout the global markets today
as virtually every sector is up on the heels of yesterday’s Fed announcement to
continue its stimulus program known as QE3.
Investors are leaving the safe haven treasury today and buying up stocks,
as confidence has increased that central banks have and may well continue to
deliver on their promises. Economic data
out of the US showed the consumer price index rose 0.6% in August for its
biggest advance since June 2009.
However, most of the increase was due to rising oil prices. Stripping out volatile food and energy
prices, core CPI only rose 0.1%. The
core CPI is a more closely watched figure by investors and the Fed as an
inflation indicator. Industrial
production fell in August and retail sales rose, again with gas stations making
up the bulk of the gains. The avg. cost
of a gallon of gas rose 8% in August.
Ultimately the rising cost of filling up at the pump will have a
negative effect on the economy as consumers will have less discretionary income
to spend. Despite the mixed economic
data the market is surging due to the easy money policy announced by the Fed
yesterday. Nearly every market index in
the US and throughout Europe and Asia are in the green this morning. Gold and oil are up and interest rates made a
big jump today as investors dumped the safe haven treasury to buy stocks. Volatility is down. It looks to be a positive day today, with
markets poised to finish the week at multi-year highs.
