Daily Investment Interpretations

January 25, 2011

2012-1-25: (Wednesday Night): The markets have soared today on the Fed's pledge to keep interest rates low through at least late 2014: Dow rises to 8-month high; Stocks Soar on Extension of Fed's Zero Interest Rate Policy. The NASDAQ Composite added 31.67 (1.14%) to 2,818.31. The Dow gained 83.10 points (0.66% to 12,758.65; the S&P 500 gained back 1.32 points (-0.1%) to settle at 1,314.63. Oil inched up to 99.83: Oil falls under $99 a barrel; gold catapulted to 1710: Gold rallies as Fed extends low-rate pledge. The VIX rose 0.64 points to 18.27.
    Today's key event was the Fed's unexpected interest rate announcement: Fed pushes out low rate pledge to late 2014. Or is that 2016?  Text of statement.

    Marketwatch says: 
    Bond yields fall most since October after Fed
    Dollar falls to low for the year after Fed  
    Fed says long-term inflation goal is 2%  
    Delamaide: Obama's pragmatic stance 
    Hulbert: Financials as a bullish indicator?    
    IMF says hasn't asked ECB to take Greek write-down.
    Matthew Lynn writes: Forget Greece; Portugal is the worry.  This article is a rouser. Matthew Lynn says that Portugal is facing the same problems as Greece (Portugal is paying 14% on its 10-year bonds), except that Portugal didn't squander money during its heydays. European banks are more heavily exposed to Portugeuse debt than they are to Greek debt. A default by Portugal could be a "Lehman moment" for the Eurozone, and to some extent, for the rest of the world.
    Soros: Don't force austerity
    Germany’s Merkel: Yes, we dare more Europe
      
    State of the Markets articles include:   
    FOMC Leaves Rates Unchanged; Announces "Exceptionally Low Rates Through 2014"  
    FHFA House Price Index Up in November; Ahead of Consensus  
    Pending Home Sales Fall In December But Trend Remains Positive  
    Barrier To Entry  
    IMF Calling For ECB To Take Hit On Its 40 Billion in Greek Debt 
    UK GDP Moves Closer to Recession Levels, BOE Leaves Rates Unchanged  
    Greek PM Looking For Debt Swap Agreement By End of Week  
     
    Market futures are slightly lower tonight.