Draghi Delivers S&P500 NEW All-Time Highs via ABS purchases Markets anticipated the ECB’s Mario Draghi to deliver some form of Quantitative Easing and he certainly pleased Markets with his announcement of Asset Backed Security purchases starting this October.  The European Central Bank (ECB) also pushed stocks higher by cutting interest rates to record lows.  The bond-buying program is a mild version of Quantitative Easing which will launch in October across the pond, comprised of asset-backed securities and euro-denominated covered bonds. Draghi said the ECB was unanimous in its commitment to using additional and unconventional instruments.  This stimulus has been initiated to tackle the deflationary environment currently in the Eurozone. Draghi did state (echoing our Fed) that other parties need to participate in this effort.  Draghi repeated today that fiscal policies had hurt economic growth, and he said that euro-area countries should not unravel the economic progress made with fiscal consolidation. Additionally, Mr. Draghi stated that some important structural steps have indeed been taken in some eurozone countries but, certainly some of the remaining 17 countries still need to reform. As for now, Markets like this but, be careful as Historic days like this ususally create pivots in Markets…   And maybe just like my grandfather, Papa Frank, used to say…”Buy the Rumor, SELL the fact.”

September 4, 2014 10:15 AM
Draghi Delivers S&P500 NEW All-Time Highs via ABS purchases

Markets anticipated the ECB’s Mario Draghi to deliver some form of Quantitative Easing and he certainly pleased Markets with his announcement of Asset Backed Security purchases starting this October.  The European Central Bank (ECB) also pushed stocks higher by cutting interest rates to record lows.  The bond-buying program is a mild version of Quantitative Easing which will launch in October across the pond, comprised of asset-backed securities and euro-denominated covered bonds.

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Draghi said the ECB was unanimous in its commitment to using additional and unconventional instruments.  This stimulus has been initiated to tackle the deflationary environment currently in the Eurozone.

Draghi did state (echoing our Fed) that other parties need to participate in this effort.  Draghi repeated today that fiscal policies had hurt economic growth, and he said that euro-area countries should not unravel the economic progress made with fiscal consolidation. Additionally, Mr. Draghi stated that some important structural steps have indeed been taken in some eurozone countries but, certainly some of the remaining 17 countries still need to reform.

As for now, Markets like this but, be careful as Historic days like this ususally create pivots in Markets…  

And maybe just like my grandfather, Papa Frank, used to say…”Buy the Rumor, SELL the fact.”

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