Economic conditions are far from ideal and uncertainty surrounding the European debt situation is likely to persist. However, it is encouraging to see coordinated efforts such as this – it highlights central banks’ willingness to take whatever means necessary to stem another fallout like 2008. Even if there is a Greek default, if it is done in an orderly manner, it should be bullish for equity markets.
Central bank promises of a flood of dollars for European lenders helped buoy investors’ spirits, keeping the recent rally rolling. Investors bought risky assets like stocks and commodities. The Dow Jones Industrial Average rose 1.7% and is up 4% in the past four days. The euro enjoyed its best day in a month. Gold, which has been seen as a safe asset, tumbled back below $1,800 a troy ounce. The European Central Bank-led effort to extend dollars to the Continent’s banks, announced ahead of Thursday’s opening bell in New York, is far from a final solution to the region’s debt woes. …
Read the full article at the Wall Street Journal.