Market Action

• Markets saw wild swings throughout the week without a coherent and comprehensive reason. All major averages in the U.S. ended the week down but rallied late thanks to good economic data and speeches from various Fed governors about possibly extending stimulus.
• While economic data from Europe continued to point to a deflationary trend the ECB’s governing body agreed to legal language that will allow for the central bank to commence in asset purchases. Some officials anticipate buying to start within days. Bond yields between Greece and the core rose to their highest points since February.
• CPI data out of China added to grim figures coming from elsewhere around the globe. Murmurs are growing that China’s economy is under considerable stress and is the biggest culprit for turmoil in bond, commodity and currency markets.
• Fed Governors Williams And Bullard made headlines this week in the U.S. when they wouldn’t rule out that the Federal Reserve may need to resort to asset purchases again in the future. With a strong dollar and other forces keeping a lid on inflation both officials are keeping open the possibility that accommodative policies may be needed again to maintain the Fed’s inflation target. The Bank of England’s Chief Economist, Andy Hldane, also stated that rates in the UK may need to stay lower a bit longer.
• BNP Paribas and Societe Generale both lowered their forecasts for oil prices for 2015. At the same time reports out of Saudi Arabia suggest the kingdom is planning for low oil prices for the next couple of years.
• Earnings season in the U.S. has been in line with expectations so far. While some notable names, such as Google and Netflix, have missed estimates, results overall have been encouraging, particularly from financials.
• The Nikkei had one of its worst weeks in six months. Prime Minister Abe has stated that Q3 performance and data will be important in formulating his decision on an additional tax rate increase.

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