I noticed a small article in this morning's WSJ Market Watch newsletter that the Japanese government is preparing to present a report projecting that the deflationary spiral its been struggling with since 1990 is ending and data suggests that inflation will be manifesting itself in the Japanese economy in 2013.
If you thought last week's commentary was brief wait until you see this one. Other commitments preclude me from composing anything other than a very brief report.
Stocks ended the week higher with the S&P 500 registering a 1.07% gain for the week. Here's the S&P 500 SPDRS ETF which mimics the S&P 500 Index:
Hi, I had a few minutes this morning to throw together some charts and make a few comments on what was a momentous week in global financial markets.
This will be extremely abbreviated but I thought it important to give my readers a perspective on these developments because I believe they set in motion a course of events that will lead this market higher into the election.
We had the first big event of this week today when the Fed's Open Market Committee (FOMC) wrapped up their two day meeting with an announcement that while they were prepared to intervene should the economy continue to weaken they were on hold for now.
Although most pundits had predicted that the outcome of this meeting would turn out as it did the market didn't like it and equities ended lower on the day while the Dollar surged:
What a difference one week makes! On Thursday's blog post my title was, "what a difference a day makes". In the headline driven market we find ourselves where fundamental and technical analysis count for little, the impending deflationary death spiral we were confronting early in the week melted away with one comment from ECB President Mario Draghi: "Within our mandate, the ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough." That last sentence sent global risk assets skyrocketing into the weekend.
Global markets rallied today on news that ECB President Mario Draghi stated that the ECB will do everything it can to bolster periphery credit markets. The street took the statement with a fair amount of skepticism but I didn't. Draghi is no EU bureaucrat from Brussels. He's a man of character who means what he says and he won't be bullied; especially by the Germans. The two LTRO's (Long Term Refinancing Operations) he implemented as ECB President prove my thesis. The Germans were not pleased with these operations yet he moved forward with them nonetheless.