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Two Ways: The European Central Bank's Deafening Silence


Strengthen your portfolio in good times and bad.


The European Central Bank's Deafening Silence

The European Central Bank is running out of bullets as record-low interest rates fail to stop a deepening recession. According to Bloomberg, policymakers are at a loss and options are limited: European Union rules prevent the bank from buying bonds directly from governments, and the EU is without a Treasury that could back it should steep losses result from new measures.

Some believe the European Central Bank has yet to exhaust all creativity, but the institution hasn't been commenting on specifics and the silence is deafening. In the interim, financial tension in the region continues to spook investors.

For additional context, see Professor Bennet Sedacca's Assets in Free Fall.

From the Bull Pen: Is gold still the option? Those bullish can continue to play the ETF (GLD). A sell stop can be set below $92-93 in the short term.

From the Bear Cave: If you're in the "the euro is ultimately doomed to failure" camp, look to the Currency Shares Euro Trust (FXE) for a downside play. In the near term, a buy stop can be set above $129-$130.

Quick Check Around the World

Asian trading closed with the Hang Seng -2.49%, Nikkei -1.87%, Sensex -2.21%, Taiwan -2.03% and Shanghai 1.54%.

Glancing towards Europe, we see the CAC -3.02%, DAX -3.53%, FTSE -2.60%

As of 8:10 AM EST, S&P Futures are trading -15 to 765, and Nasdaq futures are -17 to 1153.

A Look At Commodities

Crude oil is trading -1.51 to 38.67. Gold is +16.2 to 992.70. Silver is +0.37 to 14.305, and copper -5.4 to 141.70.

The dollar index is +0.3300 to 88.0800.

On the Radar


08:30 Consumer Price Index (MoM & YoY) (0.3% & -0.1%)
08:30 Consumer Price Index NSA
08:30 Consumer Price Index Ex Food and Energy (MoM & YoY)

TGI Friday! Good luck and have a great weekend!

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No positions in stocks mentioned.

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