Headlines that Drove the Market Higher
As ugly as last week's stock market fall was, this week saw a complete reversal with the market surging. Let's take a look at the headlines that drove the market higher: 1) The Federal Reserve led a group of six central banks from around the world in reducing the costs for European banks borrowing dollars in emergencies. This action is designed to improve liquidity for European banks if a panic occurs but does not address the key issues that have caused the European debt crisis. The market moved higher on this news due to the fact that central banks are being proactive and engaging the issue.
2) China reduced the reserve requirements for Chinese banks, a move that typically encourages more lending. Some analysis of this move questions whether China is doing this because growth in the country is slowing quicker than expected: More
3) The ADP private jobs report here in the U.S. came in stronger than expected. This report was followed up today by the BLS November jobs report which showed the unemployment rate fell from 9.0% to 8.6%. While this is good news enthusiasm needs to be tempered:
"Peter Boockvar of Miller Tabak points out that the drop in unemployment to 8.6% came because a 278,000 gain in the household survey came alongside a "large" drop of 315,000 in the labor force, which is the most we've had since January. "Thus, the drop in the unemployment rate is for mixed reasons," he writes. "The drop in the unemployment rate reads well but under the hood, the stats are more mixed as less people are in the labor force." Source
Some humor for you this weekend:
