China Rate Cut and ECB Stimulus Talk Drive Power Play for Global Markets
Today's financial recap and tomorrow's financial outlook.
ECB President Mario Draghi said today that there were no signs of improvement in the European economy, and that inflation needs to rise "as fast as possible". To that end, the ECB will increase the magnitude of its asset purchase program if current measures don't soon prove effective.
Meanwhile, China's central bank announced a surprise interest rate cut in an effort to improve slowing economic growth.
Global equity markets rose on the news, and the S&P 500 (SPX) made yet another all-time high at 2071.46 within the first 10 minutes of the US market open.
Midday profit-taking sent the index as low as 2056.75 by the afternoon, but it rebounded to finish up 0.5% at 2063.50.
For the fourth straight day, energy stocks firmed up, with the Energy Select Sector SPDR ETF (XLE) rising 1.3%. Aside from the stimulus news out of China and Europe, crude oil prices were boosted by ongoing speculation regarding a possible OPEC supply cut next week.
Additionally, Russia's energy minister said the country would consider cutting its own oil production to prop up prices. The Russian economy is highly dependent upon oil prices, and the slide this year has hurts its currency and increased uncertainty.
Video game retailer GameStop (GME) was a notably decliner today, falling 13.0% after the company reported weak earnings and forward guidance.
And software giant Microsoft (MSFT) fell 1.5% after Jefferies inititiated coverage on the stock with an Underweight rating and $40 target price.
Tomorrow's Financial Outlook
On Monday, the October Chicago Fed National Activity, November Markit PMI, and November Dallad Fed Manufacturing Activity reports will be released.
There are no major earnings reports on the calendar for Monday. However, momentum traders will be watching the action in Palo Alto Networks (PANW) and Qihoo 360 Technology (QIHU), which report earnings after the close.
Oil is likely to remain volatile with the upcoming OPEC meeting, uncertainty over the global economy, and unpredictable central bank activity.
In the evening, the Bank of Japan will release the minutes from its October 31 meeting, with Governor Kuroda giving a speech in Nagoya, Japan.
Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Daily Recap Newsletter