Market Action

  • Mario Draghi poured fuel onto the fire that has been lifting European equities. His announcement of further reductions in interest rates, including an even further negative deposit rate, along with a new program to purchase assets from banks directly stimulated markets and depreciated the Euro to its lowest level in a year.
  • U.S. stocks shrugged off a wide miss in the August jobs report and closed the week in positive territory. Some analysts and economists are expecting a strong upward revision to the number to coincide with other data from the month that has supported a consolidating recovery.
  • Oil continued its losing streak on the week. Multiple reports have stated that Saudi Arabia specifically and OPEC as a whole have cut prices for October deliveries. The Kingdom is under competition from nations such as Iraq and Iran who have been undercutting Saudi Arabia on price. No supply cutbacks are expected.
  • 10-year yield on US Treasury bonds rose on the week, breaking through a key point of resistance of 2.45%. Technical analysts are eager to see how yields react off this new level.
  •  Alibaba begins a marketing tour Monday for its long awaited IPO. Expectations are for a price between $60-$66 in an offering that will raise up to $21.1 billion for the firm and be one of the largest technology IPOs ever.
  • The Federal Reserve finalized rules set to try and make sure banks possess a greater share of liquid assets that can be used in the case of a financing squeeze. The new Liquidity Coverage ratio will require about $100 billion of high quality assets to be secured by banks. Muni bonds were not included as part of the acceptable asset list, drawing the ire of state governments and lobbyists.
  • BP was found grossly negligent in its role in the 2010 Deepwater Horizon oil spill. The ruling leaves the energy giant vulnerable to as much as $18 billion in damages.
  • European nations are proceeding with new sanctions against Russia despite a cease-fire agreement signed by Ukraine and Russia on Friday. Leaders suggested they would remain in place until a peace plan is agreed to.

 

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