The markets were up massively yesterday as the European Central Bank (ECB) announced that they would supply struggling debt laden countries with a 3 year low interest loan to help support the financial system. The first bond sale was held yesterday and was bigger than expected at 200 billion. The ECB then announced and said they would sell more bonds early next year to the tune of 480 billion.
Now all this might not seem that exciting but this shows that the European leaders and the ECB are working to avert a financial collapse, which would further wreck the global markets; this is why the U.S financial up so big yesterday. Remember, as the European financial system goes, so go our financial stocks and consequently our stock market in general. It's an unfortunate correlation, but one that will always exist. As i've written before, I expect a European financial collapse to be contained (although barely), and therefore I remain very positive on the outlooks for the U.S stock market next year. I do however foresee Europe as entering into a shallow recession for the next year and a half as the countries that have been affected by the financial disarray work thru the damage that has been caused.
As for today, the markets are relatively flat as investors digest their gains from yesterday. As for the remainder of the week, I expect the markets to trade thinly as the holiday weekend approaches (although one can never tell with this random market).
One more note, Etrade has trades down to below $8/share (which is ridiculous), and the stock now represents my favorite investment and I will be buying more shares today at around $7.80/share.
