Insisted QE2 has been to stimulate the economy last week, the Dow Jones index to close at a good 30 months high
compared to few months ago, Fed Chairman Ben Bernanke on more and more optimistic about the U.S. economic recovery is expected growth of 3% this year to 4%, and stressed the QE2 (the second round or second round of quantitative easing debt purchase plan) led stocks to rise. As of last Friday's close, the Dow Jones index was at 11,787.38 points, a record 30 months to a new high, but also achieved 7 consecutive week of gains.
on Thursday, the Federal Deposit Insurance Corporation (FDIC) held a seminar, Federal Reserve Chairman Ben Bernanke is expected U.S. economic growth this year will be 3-4 percent, although there are signs of improvement in the job market, but take longer time to drop the unemployment rate. He also believed that the risk of deflation has been a marked decline.
Despite the criticism that the Federal Reserve share the second round of debt plan (QE2) failed to achieve the target, the debt service reduction, but he argued that Fed policy has played a role in stimulating the economy, debt interest rate rise but it is a good thing , reflecting the economy to the good.
deflation risk reduction
Bernanke said in addition to his views on the overall economy, but also once again called on banks to take care of small business lending needs.
Fed expected the economy to grow by 3% this year to 4%, which is expected to close with Wall Street analysts forecast.
view of the expected economic growth, the employment market will have significantly improved, the average monthly additional 180,000 jobs, far more than last year's 94,000. Inflation will rise, expected annual inflation of 1.9%, close to Fed acceptable 1.5% to 2% range limit.
However, economists can not optimistic about the property market, due to the excess supply of housing, the increase in property prices over the next 3 years at least catch up with inflation, more expected this year, property prices will fall.
rating or by the United States cut
U.S. economic outlook improves, many thanks to the Government to extend the tax cuts by the end of last year, thanks to the market but it attracted the concerns of the financial position of the United States . Rating agencies Moody's and Standard & Poor's warned on Thursday both the U.S. debt situation may jeopardize the AAA sovereign credit rating.
U.S. stock market performance
bank shares for 7 weeks to help the Dow rose
on Friday, China's central bank to tighten credit again for information leading U.S. stocks opened slightly lower, But by the strong performance of the company, the bank dividend expectations, and relieve the debt crisis in Europe driven by other factors, the major indexes then gradually higher. At the close, the Dow Jones Industrial Average index closed at 11,787.38 points, up 0.47%, is 25 June 2008 the highest closing price since. In addition, the day the Nasdaq composite index rose 0.73%, Standard & Poor's 500 index rose 0.74%.
data show that the chip giant Intel's fourth-quarter profit rose 48%, higher than expected. International financial giant JP Morgan Chase announced fourth quarter earnings up 47%. Investors have speculated, with major increases in performance, major banks are starting dividend may be so for the entire banking sector provided support.
addition to U.S. stocks, European stocks also performed well last week, the Dow Jones pan-European 50 Index rose 4% in a single week.
contrast
emerging markets inflationary pressures in the high case p>, compared with European and American markets, most emerging markets, inflationary pressures because of the failure of the stock market opened. Market participants said the temporary relief of the debt crisis in Europe and good earnings will continue to promote the advanced economies, stock market, and interest rate expectations in emerging markets will once again under pressure.
since the New Year, the performance of large emerging markets than last year, India and China stock market falling, the stock market in Mumbai, India last week, which fell 4.22%, since the stock has plummeted since New Year's 8.04%.
In addition, the emerging markets in South America is not satisfactory. Mexico's stock market opened down 1.44% since, while Brazil and Argentina, the market rose slightly, but clearly weaker than last year.
Some analysts believe that, due to concerns about rising inflation, foreign capital fled the rapidly emerging market stocks that suffered in this year's winter open market.
foreign funds transferred from the feed
data, India, Russia, Brazil, Turkey, Indonesia and other large emerging market countries, inflation is currently hovering around 5-10% do not so high. And many countries have begun to take measures to tighten liquidity, the central bank announced that Peru will be the benchmark interest rate to 3.25%, Thailand's central bank announced interest rate by 25 basis points to 2.25%, Bank of Korea, the 7-day repurchase rate by 25 basis points to 2.75%, China raised the deposit reserve ratio high.
global fund tracker EPFR Global data released last year, emerging markets to attract 92 billion U.S. dollars of international funds, a new record. But this year the new year, emerging markets, there will be signs of foreign capital to flee. India, for example, over the past four trading days of net holdings of foreign investors in Indian equities continued, 520 million U.S. dollars foreign capital to flee.
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