St. James's Place News
Global markets rally as ECB announces bond-buying initiative
Global financial markets were given a huge shot of adrenalin last week as Mario Draghi, President of the European Central Bank (ECB), finally replaced rhetoric with substance in a once-and-for-all attempt to secure the future of the euro.
Although some parts of his plan had been leaked in advance, the ECB's decision to fulfil its role as ‘lender of last resort’ was just what the markets had been waiting for.
However, it wasn't just the ECB that galvanised the markets: poor economic data from the US also revived hopes that the US Federal Reserve would have little choice but to embark on another round of quantitative easing. In the UK, positive economic news underpinned sentiment that the recession may be ending as a recovery resumes once more.
Also in this week's bulletin...
- As the US presidential race gathers momentum, both parties are hoping that economic data in the next few months works in their favour, although last week's poor employment numbers served only to provide the Republicans with an opportunity to suggest that Mr Obama's policies had failed Americans.
- Despite the ECB's announcement that it was prepared to buy unlimited short-dated government bonds of any country that was in trouble, commentators have noted that both the process and politics involved in this solution present their own challenges and conditions for those most in need of the help.
- Stuart Mitchell of S.W. Mitchell Capital explains that there are compelling reasons for owning some of Europe's top businesses.
View this week's Market Bulletin (PDF), which contains thoughts and opinions of St. James’s Place and our range of investment managers on the key issues affecting investors.
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