Market Action

  • Equities in the US closed at all time highs as the nation continues a slow but steady recovery. The jobs report published on Friday slightly beat expectations and revealed that the US economy has recovered all jobs lost during the Financial Crisis, before adjusted for population.
  • The major economic news of the week was the implementation of several stimulus measures by Mario Draghi and the ECB. The central bank announced a negative deposit rate, a first among the world’s major central banks. In addition Draghi announced a suspension of sterilization measures, the return of LTROs and preparations on purchasing asset backed securities.
  • The Euro immediately fell on the news, dropping below € 1.36 as Draghi has mentioned concerns about the currency’s strength in past comments. However as markets consolidated they returned to trading levels of recent weeks as the ECB’s press conference revealed nothing that hadn’t been expected. Some analysts worry if the efforts are too little too late.
  • Inflation data out of Europe is still weak and the central bank officially announced lower forecasts into the future. Yields on debt throughout the continent have continued to fall.
  • News out of China remains mixed at best. The IMF reported concerns about credit dependency on China and recommended a lower growth target. The PMI reported on Monday showed the fastest growth in 5 months.
  • Mergers and Acquisitions were highlighted this week by an announcement that Sprint would be purchasing T- Mobile for $32 billion. The move reflects a merger between the third and fourth largest telecommunications firms in the US.
  • The mortgage market remains quite weak in the US as the number of applications for loans fell.
  • In energy, crude markets softened during the weak but remain above recent norms. Natural gas climbed in light of new EPA regulations on coal.

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