China cuts interest rates for the first time since 2008 sparking a rally in the morning of trading. However later in the day FED Chairman Ben Bernanke gave testimony to Congress and didn’t give any definite announcement of further stimulus causing the rally to quickly deflate.
If we do get further easing from the FED it will likely be just an extension of the current operation twist and not an outright QE3. The move by China in cutting rates was certainly welcomed by all markets around the world helping to ease the fear of a hard landing in the People’s Republic.
The Bank of England did not change its monetary policy despite the country being in a recession. The outlook for a worldwide coordinated central bank easing policy looks to be becoming less and less likely. But if conditions continue to get worse than don’t be surprised to see some action… or should we say printing.
The S&P 500 (SPX) gave back it gains on the day to finish down -0.01%, The DOW (INDU) finished in the green up 0.37%, and the Nasdaq (COMP) finessed in the red down -0.48%.
Oil fell 20 cents to close at $84.82 a barrel.
Gold fell $46.20 to close back under $1,600 at $1,588 an ounce.
The 10-Year Note remained little changed with a yield of 1.65%.