Increased Global Monetary Stimulus Helps Stocks Advance

ngGlobal equities are advancing at the start of the week and the Japanese yen has fallen to the lowest level since 2007 amid signs from central bankers in China and Europe stand ready to tackle the threat of deflation with monetary stimulus.

China’s central bank unexpectedly cut interest rates to help stimulate growth in the world’s second largest economy, decreasing the demand for safe currency assets such as the Japanese yen.

Last week equities rallied and the euro plunged after ECB President Mario Draghi announced that the ECB is committed to help increase inflation across the euro area that is faced with sluggish growth.

“For our part, we will continue to meet our responsibility – we will do what we must to raise inflation and inflation expectations as fast as possible, as our price stability mandate requires of us” Draghi said.

“If on its current trajectory our policy is not effective enough to achieve this, or further risks to the inflation outlook materialise, we would step up the pressure and broaden even more the channels through which we intervene, by altering accordingly the size, pace and composition of our purchases” Draghi added.

On Thursday OPEC will meet and discuss the possibility of a production cut to help stop the slide in oil that remains at a 4 year low.

This is shortened trading week in the U.S. with Thanksgiving holiday on Thursday.

On Tuesday the second reading of GDP will be reported for the third quarter of 2014. The first estimate was 3.5 percent. forecasts 3.0 percent. Case-Shiller and consumer confidence data will also be reported.

On Wednesday there will be large amounts of economic data reported  from initial claims, durable orders, personal income, new home sales, pending home sales, Michigan sentiment, PCE prices, and Chicago PMI.

-Johnathan Schweitzer

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