Global equity markets rallied around hopes for monetary easing Wednesday. Japan’s Nikkei rose 1.8 percent and Hong Kong’s Hang Seng was up 1.4 percent before exchanges opened in Europe. Stocks rallied there too after the ECB concluded its rate policy meeting. While the Central Bank left rates unchanged, ECB President Mario Draghi noted that some officials were leaning towards looser policy. The Bank of England meets tomorrow and some expect to hear talk of asset purchases by UK monetary officials seeking to avoid a deeper recession. Meanwhile, hopes for another round of Quantitative Easing are building in the US ahead of Fed Bernanke’s testimony to Congress tomorrow. The only economic data today showed first quarter productivity down .9 percent, which was in-line with Street expectations. The market showed little reaction to the news. Instead, it’s all about the Central Banks today and short-covering helped as well. The Dow Jones Industrial Average is up 223 points and 15 points off session highs. The tech-heavy NASDAQ gained 56 points. CBOE Volatility Index (.VIX) is off 1.93 points to 22.75 points and now 5 points below Monday morning highs. Trading in the options market is active. 7.8 million calls and 7.7 million puts so far.
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Frederic Ruffy is a well-known trader, writer, and strategist who has spent years educating investors and creating intelligent, insightful, unbiased market observations that are frequently cited by the Wall Street Journal and other financial publications. As senior analyst, Fred provides frequent and regular notes and daily updates for activity of interest.